深圳市特力(集团)股份有限公司
SHENZHEN TELLUS HOLDING CO. LTD
Annual Report 2020
April 2021
Content
Section I Important Notice Contents and Interpretation ............................................................ 1
Section II Company Profile and Main Financial Indexes .............................................................4
Section III Summary of Company Business .................................................................................. 8
Section IV Discussion and Analysis of Operation..........................................................................12
Section V Important Events .......................................................................................................... 29
Section VI Changes in shares and particular about shareholders...............................................40
Section VII Preferred Stock........................................................................................................... 46
Section VIII Convertible Bond............................................................................................................Section IX Particulars about Directors SupervisorsSenior Executives and Employees..........47
Section X Corporate Governance................................................................................................... 55
Section XI Corporate Bond............................................................................................................. 63
Section XII Financial Report...........................................................................................................64
Section XIII Documents available for reference............................................................................93
Section I. Important Notice Content and Interpretation
Board of Directors Supervisory Committee all directors supervisors and senior
executives of Shenzhen Tellus Holding Co. Ltd. (hereinafter referred to as the
Company) hereby confirm that there are no any fictitious statements misleading
statements or important omissions carried in this report and shall take all
responsibilities individual and/or joint for the reality accuracy and completion
of the whole contents.
Fu Chunlong Principal of the Company Lou Hong person in charge of
accounting works and Liao Zebin person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of Annual
Report 2020 is authentic accurate and complete.
All directors are attended the Board Meeting for report deliberation.
Securities Times Hong Kong Commercial Daily and Juchao Website
(www.cninfo.com.cn) are the media for information disclosure appointed by the
Company all information under the name of the Company disclosed on the
above said media shall prevail. Concerning the forward-looking statements with
future planning involved in the Report they do not constitute a substantial
commitment for investors and investors are advised to exercise caution of
investment risks.The profit distribution pre-plan deliberated and approved by the Board was:
based on a total share capital of 431058320 as at 31 December 2020 distributed
0.20Yuan (tax included) for every 10 shares held by whole shareholders of the
Companyno bonus shares and no public reserve transfer into share capital.
Interpretation
Items Refers to Contents
CSRC Refers to China Securities Regulatory Commission
SZ Exchange Refers to Shenzhen Stock Exchange
Shenzhen Branch of SD&C Refers to
Shenzhen Branch of China Securities Depository & Clearing
Corporation Limited
Company the Company our Company
Tellus Group
Refers to Shenzhen Tellus Holding Co. Ltd.Reporting period this reporting period
the year
Refers to Year of 2020
Auto Industry and Trade Company Refers to ShenzhenAuto Industry and Trade Corporation
Zhongtian Company Refers to Shenzhen Zhongtian Industrial Co. Ltd.
GAC Refers to Gems & Jewelry Trade Association of China
Huari Company Refers to
Shenzhen Huari Toyota Auto Sales Co. Ltd Shenzhen SDG Huari
Auto Enterprise Co. Ltd.
Zung Fu Tellus Refers to Shenzhen Zung Fu Tellus Auto Service Co. Ltd.Tellus Starlight Refers to Anhui Tellus Starlight Jewelry Investment Co. Ltd.Tellus Starlight Jinzun Refers to Anhui Tellus Starlight Jinzun Jewelry Co. Ltd.Sichuan Channel Platform Company
Sichuan Jewelry Company
Refers to Sichuan Tellus Jewelry Tech. Co. Ltd.Xinglong Company Refers to Shenzhen Xinglong Machinery Mould Co. Ltd.Tellus Property Refers to Shenzhen SDG Tellus Property Management Co. Ltd.
SDG Refers to Shenzhen Special Development Group Co. Ltd.
Tellus Treasure Company Refers to Shenzhen Tellus Treasure Supply Chain Tech. Co. Ltd.
Dongfeng Company Refers to Shenzhen Dongfeng Motor Co. Ltd.
Shenzhen Jewelry Company Refers to Shenzhen Jewelry Industry Service Co. LTD
Section II Company Profile and Main Financial Indexes
I. Company information
Short form of the stock Tellus-A Tellus-B Stock code 000025 200025
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in
Chinese)
深圳市特力(集团)股份有限公司
Short form of the Company
(in Chinese)
特力 A
Foreign name of the
Company (if applicable)
Shenzhen Tellus Holding Co.Ltd
Legal representative Fu Chunlong
Registrations add. 3/F Tellus Building No.56 Shui Bei Er Road Luohu District Shenzhen
Code for registrations add 518020
Offices add. 3/F-4/F Tellus Building Shui Bei Er Road Luohu District Shenzhen
Codes for office add. 518020
Company’s Internet Web
Site
www.tellus.cn
E-mail ir@tellus.cn
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Qi Peng Liu Menglei
Contact add.
3/F Tellus Building Shui Bei Er Road
Luohu District Shenzhen
3/F Tellus Building Shui Bei Er Road
Luohu District Shenzhen
Tel. (0755)83989390 (0755)88394183
Fax. (0755)83989386 (0755)83989386
E-mail ir@tellus.cn liuml@tellus.cn
III. Information disclosure and preparation place
Newspaper appointed for information disclosure Securities Times (Shenzhen) and Hong Kong Commercial Daily(H.K.)
Website for annual report publish appointed by
CSRC
http://www.cninfo.com.cn
Preparation place for annual report Secretariat of the BOD of Shenzhen Tellus Holding Co. Ltd.IV. Registration changes of the Company
Organization code 91440300192192210U
Changes of main business since listing
(if applicable)
No changes during the period
Previous changes for controlling
shareholders (if applicable)
1. On 31 March 1997 the 159588000 state shares held by Shenzhen Investment
Management Co. Ltd. the only non-circulation shareholder were transfer to
Shenzhen Special Development Group Co. Ltd.; total share capital of the Company
was 220281600 shares while 159588000 state shares held by SDG a 72.45% in
total share capital. 2. On 4 January 2006 the 13717440 shares as the consideration
of share merger reform were transfer to account of A-shareholders from SDG. After
share merger reform SDG holds 66.22% of the total share capital of the Company. 3.On March 27 2015 the Company has completed the non-public offering of A shares
of 77000000 of which 6000000 shares are issued to the controlling shareholder -
SDG and SDG holds 51.09% of the Company's total shares after the issuance. 4. In
2016 SDG reduced part of the company’s unrestricted outstanding shares by means
of centralized bidding the accumulated reduction of shareholdings accounted for 2%
of the company’s total share capital. As of the end of the reporting period SDG holds
49.09% of the Company’s total shares and is still the controlling shareholder of the
Company.
V. Other relevant information
CPA engaged by the Company
Name of CPA RSM Certified Public Accountants (Special General Partnership)
Offices add. for CPA
Suite 901-22 to 901-26 No.22 Fuchengmen Wai Street Wai Jing Mao Building Xincheng
Disctrict Beijing China
Signing Accountants Li Qiaoyi Qin Changming
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□Applicable √Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data or not
□Yes √No
2020 2019 Changes over last 2018
year (+-)
Operating income (RMB) 424419203.34 571072893.90 -25.68% 414238778.96
Net profit attributable to
shareholders of the listed
Company(RMB)
57663828.89 219669708.47 -73.75% 86924058.72
Net profit attributable to
shareholders of the listed
Company after deducting
non-recurring gains and
losses(RMB)
47719889.72 53738507.05 -11.20% 83286083.84
Net cash flow arising from
operating activities(RMB)
109105302.88 78911353.03 38.26% -6574979.97
Basic earnings per share
(RMB/Share)
0.1338 0.5096 -73.74% 0.2017
Diluted earnings per share
(RMB/Share)
0.1338 0.5096 -73.74% 0.2017
Weighted average ROE 4.48% 18.92% -14.44% 8.63%
Year-end of 2020 Year-end of 2019
Changes over end of
last year (+-)
Year-end of 2018
Total assets (RMB) 1708442301.15 1645782144.03 3.81% 1658295531.00
Net assets attributable to
shareholder of listed Company
(RMB)
1310524675.47 1270965296.02 3.11% 1050209537.35
Total share capital of the Company as of the previous trading day before disclosure:
Total share capital of the Company as of the previous
trading day before disclosure(Share)
431058320
Fully diluted earnings per share based on new share capital
Preferred stock dividend paid 0.00
Fully diluted earnings per share based on new share
capital(RMB/Share)
0.1338
VII. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report under either IAS (International
Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
2. Difference of the net profit and net assets disclosed in financial report under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)
□Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report under either foreign accounting rules or
Chinese GAAP (Generally Accepted Accounting Principles) in the period.
3. Reasons for differences in accounting data under domestic and foreign accounting standards
□Applicable √ Not applicable
VIII. Quarterly main financial index
In RMB
Q 1 Q 2 Q 3 Q 4
Operating income 85520408.64 111531381.65 96868200.81 130499212.24
Net profit attributable to
shareholders of the listed
Company
5209071.29 20385914.49 14042886.48 18025956.63
Net profit attributable to
shareholders of the listed
Company after deducting
non-recurring gains and losses
2618160.47 18784660.36 12592060.82 13725008.07
Net cash flow arising from
operating activities
6507973.24 10798348.96 96198322.43 -4399341.75
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial
index disclosed in the Company’s quarterly report and semi-annual report
□Yes √No
IX. Items and amounts of non-recurring profit (gain)/loss
√Applicable □ Not applicable
In RMB
Item 2020 2019 2018 Note
Gains/losses from the disposal of
non-current asset (including the write-off
that accrued for impairment of assets)
1.00 210897055.76 -4424801.74
Tax refund breaks approved beyond the
authority or without official approval
documents
Governmental subsidy reckoned into 1522079.42 276907.09 3482.07 Subsidy from the
current gains/losses (not including the
subsidy enjoyed in quota or ration
according to national standards which are
closely relevant to enterprise’s business)
government’s
business-friendly
policies
Fund possession cost reckoned into
current gains/losses charged from
non-financial business
435887.15 47083.32 76041.64
Interest of the
dividend receivable
from Dongfeng
Company
When an enterprise acquires a subsidiary
associated enterprise and joint venture the
investment cost is less than the income
generated by the fair value of the
identifiable net assets of the invested
entity
Gains/losses from exchange of
non-monetary assets
Gains/losses from entrust investment or
assets management
9611577.38
Impairment provision for all assets due to
force majeure such as natural disasters
Gains/losses of debt restructuring
Enterprise restructuring costs such as the
staff placement expenses and integration
costs etc.Gains/losses arising from the transaction
whose transaction price is clearly unfair
exceed the fair value
Current net gains/losses of the subsidiary
from beginning of the period to the date of
merger arising from the combination
under the same control
Gains/losses arising from the
contingencies unrelated to the normal
operation of the Company
-2225468.76
Except for effective hedge business
relevant to normal operation of the
Company gains and losses arising from
fair value change of tradable financial
assets derivative financial liabilities
tradable financial liability and derivative
financial liability and investment income
from disposal of tradable financial assets
8812468.26 10684691.16 Financial returns
derivative financial liabilities tradable
financial liability derivative financial
liability and other debt investment
Restoring of receivable a and contractual
assets impairment provision that tested
individually
493295.33 935476.72
Gains/losses obtained from external
entrusted loans
Gains/losses arising from change of the
fair value of investment real estate which
is subsequently measured using the fair
value model
Impact on current gains/losses while a
one-time adjustment to the current
gains/losses in accordance with the
requirement of laws of taxation and
accounting and regulations.Income of custody fee from entrusted
operations
Other non-operating income and
expenditure except for the aforementioned
items
3196406.42 -744465.10 485180.13
Mainly the reversal
of accrual liability
from Guangming
Watch
Other gain/loss that meet the definition of
non-recurring gain/loss
44839.26 9378.94 Tax refunds
Less: Impact on income tax 3123780.55 55755620.55 -161206.61
Impact on minority shareholders’
equity (post-tax)
1437257.12 419305.92 49242.45
Total 9943939.17 165931201.42 3637974.88 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss explain reasons
□ Applicable √ Not applicable
In reporting period the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
the Public --- Extraordinary Profit/loss
Section III. Summary of Company Business
I. Main businesses of the Company in the reporting period
The main business of the Company during the reporting period was auto sales auto testing maintenance and
accessories sales; resource assets management and jewelry service business.(i) Automobile sales testing maintenance and parts sales: During the reporting period the company increased
revenue and improved efficiency through measures such as strengthening the management of holding companies
improving service quality adjusting high-end vehicle sales strategies and strengthening customer maintenance
management and Huari Company’s total profits exceeded 10 million for the first time in recent years and its
revenue and profit hit record highs in recent years. In the whole year the sales revenue of automobiles was 204.93
million yuan an increase of 21.58% over the same period last year.(ii) Resource asset management: During the reporting period due to the severe impact of the epidemic the
complex economic situation and other unfavorable factors the entire Shenzhen market was facing greater
downward pressure on leasing prices especially due to the impact of the epidemic the burden of jewellery
industry operators has increased plus the newly-developed properties in the Shuibei area have been continuously
put into use and the investment of the properties held by the company in the area was facing severe challenges. In
the face of unfavorable situations the company innovated operations with the help of commercial management
and operation experts perfected the system and procedures intensified publicity and promotion and took multiple
measures to increase the rental rate of properties. In addition continuously optimized the operation and control
model promoted the construction of 421 Tellus Home Experience Hall through re-planning fast promotion fine
management and publicity enhanced the image and value of old properties explored the company's business
layout improved the level of resource asset management and built a benchmark for the transformation and
upgrading of traditional properties. In the whole year property rental and service income was 141.28 million yuan
a decrease of 12.35% from the same period last year. The main reason was that in response to the COVID-19
epidemic the company fulfilled its social responsibilities and waived some property rents.(iii) Jewelry service business: In 2020 the epidemic sweeping at home and abroad has caused a sharp increase in
downward pressure on the economy. The jewelry industry as an optional consumption has been severely
impacted. Upstream jewellery merchants have slowed down the flow of funds due to reduced customer purchases
and the profits declined while the jewelry terminal operators have speeded up measures such as closing stores to
stop losses. During the reporting period in the face of the unfavorable market environment the company
concentrically pushed forward the third-party strategy of realizing jewellery and built a third-party jewellery
ecosystem relying on the physical platform. The jewelry industry company was established in July. At the end of
September the phase I project of the Treasury Supply Chain Company officially opened. In October the launch
ceremony of the customs jewellery and jade bonded supervision reform pilot program was held. The company
continued to innovate the third-party business model of jewelry actively planned and deployed the industry sector
and has taken a new step in the third-party jewelry strategy. The annual revenue of jewelry business was 34.86
million yuan a decrease of 81.98% compared with the same period last year. The main consideration was the
company's strategic layout combined with resource allocation management costs coordinated development and
other issues the holding subsidiary Sichuan Tellus Jewelry Tech. Co. Ltd. was closed down and liquidated.II. Major changes in main assets
1. Major changes in main assets
Major assets Note of major changes
Equity assets
Book value of long-term equity investment as of 31 December 2020 amounting to
123641000 Yuan decreased 38537600 Yuan over that of period beginning with
23.76% down mainly due to the profit bonus from shareholding enterprise.
Fixed assets
Book value of fixed assets as of 31 December 2020 amounting to 119136900 Yuan
increased 12017100 Yuan over that of period beginning with 11.22% up mainly due
to the new safe deposit box transfer-in to Treasure Supply Chain Company.Intangible assets No major change
Construction in progress
Book value of the construction in progress as of 31 December 2020 amounting to
101740500 Yuan an increase of 54086100 Yuan over that of period-begin with
113.50% up. Mainly due to the input for the preliminary project of Tellus Jinzhuan
Trading Building (Phase II of Tellus Shuibei Jewelry Building).Monetary fund
Book value of monetary fund as of 31 December 2020 amounting to 237625700
Yuan decreased 191225900 Yuan over that of period beginning with 44.59% down
mainly due to the payment of equity transfer of Xinglong Company the enterprise
income tax distribution of cash dividend and purchasing the financial products.Tradable financial assets
Book value of the tradable financial assets as of 31 December 2020 amounting to
314013900 Yuan an increase of 253527300 Yuan over that of period-begin with
419.15% up. Mainly due to the unmatured financial products purchased.
Account receivable
Book value of account receivable as of 31 December 2020 amounting to 19828500
Yuan decreased 92784700 Yuan over that of period beginning with 82.39% down
mainly because operation from Sichuan Jewelry Company ceased during the year and
the opening account receivable were fully recovered.Other account receivable
Book value of other account receivable as of 31 December 2020 amounting to
29269800 Yuan decreased 15638800 Yuan over that of period beginning with
34.82% down mainly due to the recovery of part dividends receivable from
participating enterprise- Dongfeng Company for previous years.Other current assets
Book value of other current assets as of 31 December 2020 amounting to 6000600
Yuan an increase of 2596600 Yuan over that of period-begin with 76.28% up. Mainly
due to the increase in amount of input VAT to be deducted.Long-term amortized expenses
Book value of long-term amortized expenses as of 31 December 2020 amounting to
30714900 Yuan an increase of 17108100 Yuan over that of period-begin with
125.73% up. Mainly due to the transfer-in from decoration of Treasure Supply Chain
Company Shenzhen Jewelry Company and Tellus Building.
Other non-current assets
Book value of other non-current assets as of 31 December 2020 amounting to
55993500 Yuan an increase of 49104300 Yuan over that of period-begin with
712.78% up. Mainly due to the payment for bundled construction funds for public
facilities of lots 02 and 03 of the Gold Jewellery Industrial Park Upgrade project
2. Main overseas assets
□Applicable √ Not applicable
III. Core Competitiveness Analysis
(i) Deeply cultivate the jewelry industry give full play to the advantages of identity and build an industrial
platform
The company has continued to try to innovate business models and steadily promote the implementation of
transformation projects give full play to the credit advantages of state-owned listed companies and the physical
platform resources in the Shuibei area where the jewelry industry gathers deeply penetrate into the industry chain
of jewelry industry and rapidly increase the reputation and industry influence of Tellus in the jewelry industry
accelerate the implementation of Tellus’ strategic projects and realize Tellus’s goal of strategic transformation into
a third-party integrated operation service provider for the jewelry industry. Shenzhen Tellus Treasure Supply
Chain Tech. Co. Ltd. was established in 2019 to carry out jewelry supply chain business consolidate third-party
jewelry services and create a third-party value-added service platform for the jewelry industry that integrates
precious metal storage gold and diamond supply chain services and third-party safe deposit boxes. Shenzhen
Jewelry Industry Service Co. LTD was established in 2020 to provide bonded display bonded warehousing
customs declaration logistics settlement and other services and finally it will be built into a comprehensive
element trading service platform with international influence integrating jewelry and diamond raw materials and
finished products display spot trading testing identification design processing e-commerce financial services
and insurance.(ii) Abundant property resources provide stable business income and financial support
The company is the largest owner of the Tellus Gman Gold Jewelry Industrial Park in the Shuibei area Tellus
Shuibei Jewelry Building has been fully put into use and the construction project of the Tellus Jinzhuan Trading
Building is progressing as planned. At the same time as the largest owner of the 04 and 05 plots in the urban
renewal unit planning project of Buxin Industrial Zone the company will plan and construct innovative industrial
projects in Buxin area that conform to the overall strategic layout of the city district and the Company through
renovation. The company will maintain its position as the largest owner of Shuibei and Buxin areas and grasp the
advantages of physical platform resources in the core area of the jewelry industry. In addition the Company has a
large amount of property resources in various districts in Shenzhen on the basis of maintaining the stability of the
original leasing business the company will actively promote the improvement of property quality and transform
its old properties from the traditional method of simple leasing to the direction of property asset operation so as to
fully enhance and tap the added value of the property brand bring stable business income and cash flow to the
company and provide a solid foundation for the company's long-term development.Section IV Discussion and Analysis of the Operation
I. Introduction
During the reporting period under the correct leadership of the party committee and the board of directors and
with the joint efforts of all staff the company upheld the spirit of "fair diligent hardworking and practical" and
steadily promoted the implementation of various projects to ensure the smooth implementation of the strategy and
all work has achieved remarkable results.
(1) The third-party service platform for jewellery has reached a new level: Shenzhen Jewelry Industry Service Co.
LTD. was established in July and the launch ceremony of the customs jewellery and jade bonded supervision
reform pilot program was held on October 21 which promoted the innovative development of jewellery business.
(2) The opening of the Treasury Supply Chain Company: The phase I project of Treasury Supply Chain Company
officially opened at the end of September becoming a new starting point for the company's strategic
transformation and business expansion.
(3) Qualitative improvement of commercial operation and management capabilities: Tellus Jewelry Building
strives to build a benchmark for the industrial park demonstrates the responsibility of state-owned enterprises
and successfully applies for the first national three-star green building in Luohu District which is the most
difficult to review and has the highest level of green building grade in China green building. As of the end of the
reporting period the occupancy rate of Tower A and Tower B was 100% the highest in the park.
(4) Tellus Home Experience Hall creates a benchmark for the transformation and upgrading of traditional
properties: The 421 projects opened as scheduled increased revenue opened up new businesses and mastered the
market initiative.
(5) With the help of government policies in the automotive aftermarket business revenue and profits hit record
highs in recent years.
(6) Tellus Jinzhuan Trading Building project: Overcome the impact of the epidemic and go all out to ensure the
construction period.
During the reporting period the Company achieved an operating income of 424.42 million yuan decreased by
146.65 million yuan compared with 571.07 million yuan in the same period of the previous year with 25.68%
declined; excluding the rental reduction of 30.38 million yuan due to the epidemic actual operating income was
454.8 million yuan a decrease of 116.27 million yuan or 20.36% from 571.07 million yuan in the corresponding
period of the previous year; the main changes in income were ①Sichuan Jewelry Company ceased operation this
year; ② due to the increase in sales of two new-mid-to-high-end models of Avalon and Vellfire this year from
Huari Company sales income increased by 68.78 million yuan y-o-y with 31.77% growth total profit achieved
76.7 million yuan decreased 225.9 million yuan compared with 302.6 million yuan in the same period of the
previous year; net profit attributable to parent company was 57.66 million yuan decreased by 162.01 million yuan
compared with 219.67 million yuan in the same period of the previous year mainly due to the recognition of an
investment gains of 210.68 million yuan on the equity transfer of Xinglong in the same period of the previous
year.II. Main business analysis
1. Introduction
See the “I-Introduction” in “Discussion and Analysis of the Operation”
2. Revenue and cost
(1) Constitute of operation revenue
In RMB
2020 2019
y-o-y changes
(+-)Amount
Ratio in operation
revenue
Amount
Ratio in operation
revenue
Total operation
revenue
424419203.34 100% 571072893.90 100% -25.68%
According to industries
Auto sales 204928883.35 48.28% 168551160.58 29.51% 21.58%
Auto inspection
and maintenance
and accessories
sales
43351689.36 10.21% 47952488.50 8.40% -9.59%
Property rental and
service
141283172.60 33.29% 161185484.32 28.23% -12.35%
Jewelry wholesale
and retails
34855458.03 8.21% 193383760.50 33.86% -81.98%
According to products
Auto sales 204928883.35 48.28% 168551160.58 29.51% 21.58%
Auto inspection
and maintenance
and accessories
sales
43351689.36 10.21% 47952488.50 8.40% -9.59%
Property rental and
service
141283172.60 33.29% 161185484.32 28.23% -12.35%
Jewelry wholesale
and retails
34855458.03 8.21% 193383760.50 33.86% -81.98%
According to region
Shenzhen 407455899.14 96.00% 377689133.40 66.14% 7.88%
Anhui 0.00% 4521763.87 0.79% -100.00%
Sichuan 16963304.20 4.00% 188861996.63 33.07% -91.02%
(2) Industries products or regions that account for over 10% of the Company’s operating income or
operating profit
√Applicable □ Not applicable
In RMB
Operating
income
Operating cost
Gross
profit ratio
Increase/decrea
se of operating
income y-o-y
Increase/decrea
se of operating
cost y-o-y
Increase/decrea
se of gross
profit ratio
y-o-y
According to industries
Auto sales 204928883.35
191680818.0
7
6.46% 21.58% 22.36% -0.60%
Auto inspection and
maintenance and
accessories sales
41913088.24 32521898.98 22.41% -10.38% -18.01% 7.22%
Property rental and
service
134609167.52 57587615.11 57.22% -12.16% 13.41% -9.65%
Jewelry wholesale
and retails
34855458.03 34757161.55 0.28% -81.98% -80.87% -5.76%
According to products
Auto sales 204928883.35
191680818.0
7
6.46% 21.58% 22.36% -0.60%
Auto inspection and
maintenance and
accessories sales
41913088.24 32521898.98 22.41% -10.38% -18.01% 7.22%
Property rental and
service
134609167.52 57587615.11 57.22% -12.16% 13.41% -9.65%
Jewelry wholesale
and retails
34855458.03 34757161.55 0.28% -81.98% -80.87% -5.76%
According to region
Shenzhen 399343292.94
300537120.2
6
24.74% 8.35% 21.88% -8.35%
Anhui -100.00% -100.00% 7.44%
Sichuan 16963304.20 16010373.45 5.62% -91.02% -90.97% -0.48%
Under circumstances of adjustment in reporting period for statistic scope of main business data adjusted main business based on
latest one year’s scope of period-end
□ Applicable √ Not applicable
(3) Income from physical sales larger than income from labors
√ Yes □ No
Industries Item Unit 2020 2019
Y-o-y changes
(+-)
Auto sales
Sales volume Set 1177 1042 12.96%
Storage Set 122 108 12.96%
Reasons for y-o-y relevant data with over 30% changes
□ Applicable √ Not applicable
(4) Fulfillment of the Company’s signed significant sales contracts up to this reporting period
□Applicable √ Not applicable
(5) Constitute of operation cost
Classification of industries
In RMB
Industries Item
2020 2019
Y-o-y changes
(+-)Amount
Ratio in
operation cost
Amount
Ratio in
operation cost
Auto sales Automobile 191680818.07 60.04% 156655616.45 36.35% 22.36%
Auto inspection
and
maintenance
and accessories
sales
Accessory
maintenance
and detection
34227425.76 10.72% 40564299.92 9.41% -15.62%
Property rental
and service
Lease property
management
and other
58595796.21 18.35% 52101447.87 12.09% 12.46%
Jewelry
operation
Retail and
wholesale of
jewelry
34757161.55 10.89% 181699948.40 42.16% -80.87%
Total 319261201.59 100.00% 431021312.64 100.00% -25.93%
Classification of products
In RMB
Products Item
2020 2019
Y-o-y changes
(+-)Amount
Ratio in operation
cost
Amount
Ratio in operation
cost
Auto sales Automobile 191680818.07 60.04% 156655616.45 36.35% 22.36%
Auto inspection
and maintenance
and accessories
sales
Accessory
maintenance and
detection
34227425.76 10.72% 40564299.92 9.41% -15.62%
Property rental
and service
Lease property
management and
other
58595796.21 18.35% 52101447.87 12.09% 12.46%
Jewelry operation
Retail and
wholesale of
jewelry
34757161.55 10.89% 181699948.40 42.16% -80.87%
Total 319261201.59 100.00% 431021312.64 100.00% -25.93%
(6) Whether the changes in the scope of consolidation in Reporting Period
√Yes □ No
Totally 16 enterprises included in consolidate statement for year of 2020 found more in the VI. Change of Consolidate Scope carry
in the annotation of financial statement in Auditing Report 2020 released on Juchao Website on the same date.
(7) Major changes or adjustment in business product or service of the Company in Reporting Period
□Applicable √ Not applicable
(8) Major sales and main suppliers
Major sales client of the Company
Total top five clients in sales (RMB) 40560017.67
Proportion in total annual sales volume for top five
clients
9.56%
Ratio of the sales from related parties in total annual
sales among the top five clients
0.00%
Information of top five clients of the Company
Serial Name Sales (RMB) Proportion in total annual sales
1 Client 1 17199716.81 4.05%
2 Client 2 6560964.85 1.55%
3 Client 3 6302468.18 1.48%
4 Client 4 5667079.49 1.34%
5 Client 5 4829788.34 1.14%
Total -- 40560017.67 9.56%
Other situation of main clients
□ Applicable √ Not applicable
Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 268265209.77
Proportion in total annual purchase amount for top five
suppliers
84.03%
Ratio of the purchase from related parties in total
annual purchase among the top five suppliers
4.51%
Information of top five suppliers of the Company
Serial Suppliers Procurement (RMB) Proportion in total annual procurement
1 Supplier 1 202663802.20 63.48%
2 Supplier 2 25421822.00 7.96%
3 Supplier 3 16927433.67 5.30%
4 Supplier 4 14402981.10 4.51%
5 Supplier 5 8849170.80 2.77%
Total -- 268265209.77 84.03%
Other notes of main suppliers of the Company
□ Applicable √ Not applicable
3. Expenses
In RMB
2020 2019
Increase/decrease
y-o-y (+-)
Note of major changes
Sales expense 17715132.43 23956102.30 -26.05%
Tellus Starlight Jinzun is in a liquidation phase
in the year the operating expenses declined
form a year earlier and reduced the social
security costs due to the impact of epidemic and
the salary costs declined on a y-o-y basis for the
staff changes
Management
expense
39984244.07 43668263.92 -8.44%
Tellus Starlight Jinzun is in a liquidation phase
in the year the management expenses declined
form a year earlier and reduced the social
security costs due to the impact of epidemic and
the salary costs declined on a y-o-y basis for the
staff changes
Financial
expense
-3305883.68 4982765.55 -166.35%
Mainly because there was an interest
expenditure on bank loans in the same period
last year and none in the current period
4. R&D investment
□Applicable √ Not applicable
5. Cash flow
In RMB
Item 2020 2019 Y-o-y changes (+-)
Subtotal of cash in-flow from
operation activity
580706758.00 668606354.87 -13.15%
Subtotal of cash out-flow from
operation activity
471601455.12 589695001.84 -20.03%
Net cash flow arising from
operating activities
109105302.88 78911353.03 38.26%
Subtotal of cash in-flow from
investment activity
1465610805.84 2235119053.77 -34.43%
Subtotal of cash out-flow from
investment activity
1763400388.10 1883237512.37 -6.36%
Net cash flow arising from
investment activity
-297789582.26 351881541.40 -184.63%
Subtotal of cash in-flow from
financing activity
42971759.33 178020000.00 -75.86%
Subtotal of cash out-flow from
financing activity
46625829.24 350992854.04 -86.72%
Net cash flow arising from
financing activity
-3654069.91 -172972854.04 -97.89%
Net increased amount of cash
and cash equivalent
-192205601.18 257820137.12 -174.55%
Main reasons for y-o-y major changes in aspect of relevant data
√Applicable □Not applicable
Item 2020 2019 Y-o-y changes Note
(+-)
Net cash flow arising from
operating activities
109105302.88 78911353.03 38.26%Sichuan Jewelry Company collected
full opening account receivable during
the year
Subtotal of cash in-flow from
investment activity
1465610805.84 2235119053.77 -34.43%At last period received a equity
transfer payments and interest from
Xinglong Company
Net cash flow arising from
investment activity
-297789582.26 351881541.40 -184.63%At last period received a equity
transfer payments and interest from
Xinglong Company
Subtotal of cash in-flow from
financing activity
42971759.33 178020000.00 -75.86%The loans declined from a year earlier
and last year the minority
shareholder’s investment for Sichuan
Jewelry Company increased
Subtotal of cash out-flow from
financing activity
46625829.24 350992854.04 -86.72%Repayment of the bank liquidity fixed
loan principal and interest and
borrowings in the previous period
Net cash flow arising from
financing activity
-3654069.91 -172972854.04 -97.89%Repayment of the bank liquidity fixed
loan principal and interest and
borrowings in the previous period
Explanation of the reasons for significant difference between the net cash flow from operating activities and the net profit of the year
during the reporting period
□Applicable √Not applicable
III. Analysis of the non-main business
√Applicable □ Not applicable
In RMB
Amount Ratio in total profit Note
Whether be
sustainable
Investment
income
23458405.59 30.58%
Gains on financial management and
recognition of investment income
from participating enterprises
N
Gain/loss of fair
value changes
316475.19 0.41%
Changes in fair value of the
outstanding financial products
N
Assets
impairment
-1504929.06 -1.96%
Sichuan Jewelry Company collected
the reversal of bad debt provision for
account receivable
N
Non-operation 3289158.12 4.29% Mainly the reversal of accrual N
revenue liability from Guangming Watch
Non-operation
expenditure
92751.70 0.12%
The losses on destruction and
scrapping of non-current assets and
civil compensation payments
N
IV. Assets and liability
1. Major changes of assets composition
In RMB
Year-end of 2020 Year-begin of 2020
Ratio
changes(+-)
Notes of
major
changesAmount
Ratio in total
assets
Amount
Ratio in total
assets
Monetary fund 237625698.93 13.91% 428851606.04 26.06% -12.15%
Account receivable 19828510.36 1.16% 112613224.27 6.84% -5.68%
Inventory 22079679.93 1.29% 21389602.83 1.30% -0.01%
Investment real
estate
568246616.13 33.26% 554599503.55 33.70% -0.44%
Long-term equity
investment
123640955.57 7.24% 162178544.05 9.85% -2.61%
Fix assets 119136917.91 6.97% 107119796.59 6.51% 0.46%
Construction in
process
101740485.48 5.96% 47654393.55 2.90% 3.06%
Long-term loans 11171759.33 0.65% 0.65%
Tradable financial
assets
314013869.86 18.38% 60486575.34 3.68% 14.70%
Other non-current
assets
55993467.99 3.28% 6889167.54 0.42% 2.86%
Taxes payable 21062154.32 1.23% 71425267.61 4.34% -3.11%
Other account
payable
158663974.62 9.29% 101266802.49 6.15% 3.14%
Account received
in advance
2403580.47 0.14% 27299822.71 1.66% -1.52%
Contract liability 18988628.13 1.11% 1.11%
2. Assets and liability measured by fair value
√Applicable □Not applicable
In RMB
Items
Period-begi
nning
Gains/losse
s of change
of fair
value in the
period
Accumulati
ve changes
of fair
value
reckoned
into equity
Impairme
nt accrual
in the
period
Amount of
purchase in
the period
Amount of sale
in the period
Other
chan
ges
Period-en
d
Financial
assets
1. Tradable
financial
assets
(excluding
derivative
financial
assets)
60486575.
34
316475.19 0 0
159078000
0.00
1337252705.
48
0
3140138
69.86
2.
Derivative
financial
assets
0 0 0 0 0 0 0 0
3. Other
creditor's
rights
investment
0 0 0 0 0 0 0 0
4. Other
equity
instruments
Investment
10176617.
20
0 0 0 0 0 0
1017661
7.20
Subtotal of
financial
assets
0 0 0 0 0 0 0 0
Investment
Real Estate
0 0 0 0 0 0 0 0
Productive
biological
assets
0 0 0 0 0 0 0 0
Other 0 0 0 0 0 0 0 0
Above total
70663192.
54
0 0 0 0 0 0
3241904
87.06
Financial
liabilities
0.00 0 0 0 0 0 0 0.00
Whether there have major changes on measurement attributes for main assets of the Company in report period or not
□ Yes √No
3. Right of the assets restrained till end of the Period
Found more in Auditing Report 2020 released on Juchao Website on the same date: V. “51-Assets subject to restrictions onownership or use” carry in the annotation of financial statement
V. Investment
1. Overall situation
√Applicable □Not applicable
Investment amount in the period (RMB)
Investment amount at same period of last
year (RMB)
Changes (+-)
134347000.00 169530000.00 -20.75%
2. The major equity investment obtained in the reporting period
√Applicable □Not applicable
In RMB
Name
of
investe
d
compan
y
Princip
al
busines
s
Method
of
investm
ent
Amoun
t of
investm
ent
Shareh
olding
Capital
sources
Partner
s
Term of
investm
ent
Type of
product
s
Status
as of
the
balance
sheet
date
Expecte
d return
Current
investm
ent
profit
and
loss
Whethe
r
litigatio
n
Date of
disclos
ure (if
applica
ble
)
Index
of
disclos
ure (if
applica
ble
)
Shenzh
en
Jewelry
Industr
y
Service
Co.
LTD
Jewelle
ry fair
plannin
g
jeweller
y on
consign
ment
exhibiti
on
plannin
g
confere
nce
services
New
establis
hed
13000
000.00
65%
Own
funds
Shenzh
en
Luohu
Investm
ent
Holdin
g Co.
Ltd.No
fixed
deadlin
e
Jewelle
ry fair
plannin
g
jeweller
y on
consign
ment
exhibiti
on
plannin
g
confere
nce
services
Registr
ation
complet
ed
0.00
-7852
792.82
N
2020-6-
20
Found
more in
Notice
(No.:
34)
release
d on
Securiti
es
Times
Hong
Kong
Comme
rcial
26
and
marketi
ng
plannin
g
and
marketi
ng
plannin
g
Daily
and
Juchao
Website
Shenzh
en
Tellus
Treasur
e
Supply
Chain
Tech.
Co.
Ltd.Purchas
e sales
and
leasing
of gold
jewelry
and
preciou
s metal
product
s
coffer
lease
and
wareho
using
services
Capital
increas
e
40747
000.00
100%
Own
funds
N/A
No
fixed
deadlin
e
Purchas
e sales
and
leasing
of gold
jewelry
and
preciou
s metal
product
s
coffer
lease
and
wareho
using
services
Change
complet
ed
0.00
-1172
700.64
N
Found
more in
Notice
(No.:
31)
release
d on
Securiti
es
Times
Hong
Kong
Comme
rcial
Daily
and
Juchao
Website
Total -- --
53747
000.00
-- -- -- -- -- -- 0.00
-9025
493.46
-- -- --
3. The major non-equity investment doing in the reporting period
√Applicable □Not applicable
In RMB
Project
Name
Investme
nt
Method
Invested
with
fixed
assets
(Y/N)
Industry
involved
in
Investme
nt
Projects
Investme
nt
Amount
in this
Reportin
g Period
Actual
Investme
nt
Amount
up to the
End of
Reportin
g Period
Capital
Source
Project
Schedule
Anticipat
ed
Income
Realized
Income
up to the
End of
Reportin
g Period
Reasons
for not
Reaching
the
Planned
Schedule
and
Anticipat
ed
Income
Date of
disclosur
e (if
applicabl
e
)
Index of
disclosur
e (if
applicabl
e
)
Tellus Self-built Y Urban 681600 174250 Raised 0.00 0.00 Not 2019-05- Found
27
Jinzhuan
Trading
Building
renewal
pilot
project -
upgradin
g of the
gold
jewelry
industry
park
00.00 000.00 fund by
the
Compan
y
applicabl
e
28 more in
Notice
(No.:
2)
released
on
Securitie
s Times
Hong
Kong
Commer
cial
Daily
and
Juchao
Website
Transfor
mation
&
upgradin
g project
of the
421
worksho
p in
Bagualin
g
Self-built Y
Redecora
tion
renovatio
n and
upgradin
g of the
worksho
p
124400
00.00
264400
00.00
Raised
fund by
the
Compan
y
0.00 0.00
Not
applicabl
e
2019-03-
26
Found
more in
Notice
(No.:
6)
released
on
Securitie
s Times
Hong
Kong
Commer
cial
Daily
and
Juchao
Website
Total -- -- --
806000
00.00
200690
000.00
-- -- -- -- --
4. Financial assets investment
(1) Securities investment
□Applicable √ Not applicable
28
(2) Derivative investment
□Applicable √ Not applicable
5. Application of raised proceeds
□Applicable √ Not applicable
The Company has no application of raised proceeds in the Period
VI. Sales of major assets and equity
1. Sales of major assets
□Applicable √Not applicable
2. Sales of major equity
□Applicable √Not applicable
VII. Analysis of main holding Company and stock-jointly companies
√Applicable □Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
Company
name
Type
Main
business
Register
capital
Total
assets
Net assets
Operating
revenue
Operating
profit
Net profit
Shenzhen
Auto
Industry
and Trade
Corporatio
n
Subsidiary
Sales of
auto and
accessories
RMB
58.96
million
43366196
4.71
33762275
9.77
22687407
.98
6884307.
37
5321232.
59
Shenzhen
SDG Huari
Auto
Enterprise
Co. Ltd.
Subsidiary
Auto
maintenan
ce and
production
and sales
of
accessories
USD 5
million
74840304
.65
27537437
.40
34313269
.53
3967519.
15
3132604.
24
Shenzhen
Zhongtian
Industrial
Co. Ltd.
Subsidiary
Property
rental
RMB
366.2219
million
64622297
7.22
41787677
8.10
66396971
.04
26689705
.90
20561665
.55
Shenzhen Subsidiary Auto sales RMB 2 74201765 10270017 25098442 7649023. 6074051.29
Huari
Toyota
Automobil
e Sales
Service
Co. Ltd
million .84 .48 0.93 27 06
Shenzhen
Xinyongto
ng Auto
Vehicle
Inspection
Equipment
Co. Ltd.
Subsidiary
Manufactu
re of
inspection
equipment
for motor
vehicle
RMB
19.61
million
14369010
.07
8787695.
48
4674191.
02 990566.89 933261.75
Shenzhen
Tellus
Xinyongto
ng
Automobil
e
Developme
nt Co. Ltd
Subsidiary
Inspection
and repair
of motor
vehicle
RMB
32.90
million
87046807
.89
67877149
.07
10600384
.70
7078483.
27
5367074.
50
Shenzhen
Tellus
Chuangyin
g Tech.
Co. Ltd.
Subsidiary
Property
rental
RMB 14
million
15753836
.46
12801503
.32
2678005.
05
-571903.5
7
-571720.8
1
Sichuan
Tellus
Jewelry
Tech. Co.Ltd.Subsidiary
Jewelry
sales
RMB 150
million
15614735
3.73
15500236
6.33
16963304
.20
4548592.
50
3650368.
58
Shenzhen
Tellus
Treasure
Supply
Chain
Tech. Co.Ltd.Subsidiary
Purchase
sales and
leasing of
gold
jewelry
and
precious
metal
products
coffer
lease and
warehousi
ng services
RMB 50
million
52220669
.82
48713902
.85
17408759
.29
-1172700.
65
-1172700.
64
Shenzhen
Jewelry
Industry
Service
Co. LTD
Subsidiary
Jewellery
fair
planning
jewellery
on
consignme
nt
exhibition
planning
conference
services
and
RMB 100
million
14730616
.63
12147207
.18 483394.54
-7852792.
97
-7852792.
82
30
marketing
planning
Shenzhen
Zung Fu
Tellus Auto
Service
Co. Ltd.
Joint stock
Company
Car sales
and
maintenan
ce
RMB 30
million
23766626
5.54
96020417
.54
1247864
433.00
41571156
.75
30838325
.75
Shenzhen
Dongfeng
Motor Co.Ltd.Joint stock
Company
Manufactu
re and
maintenan
ce of
automobile
RMB 100
million
55072888
0.62
14018667
6.80
39989371
2.73
-2312755
6.29
-2679128
1.02
Shenzhen
Tellus
Gman
Investment
Co. Ltd.
Joint stock
Company
Investment
in industry
property
manageme
nt and
leasing
RMB
123.70496
million
39870345
1.61
75333482
.20
87082384
.96
27928653
.73
21022715
.25
Particular about subsidiaries obtained or disposed in report period
√Applicable □Not applicable
Name
Way to obtained and dispose in the
Period
Impact on overall operation and
performance
Shenzhen Jewelry Industry Service Co.
LTD
Newly established
An important part of the jewelry third
party operation service strategy of the
Company the Shenzhen Jewelry
Company is in progress of construction
in 2020 and with net profit of -7.85
million yuan for 2020.VIII. Structured vehicle controlled by the Company
□Applicable √Not applicable
IX. Future development prospects
(i) Industry pattern & development trend
In 2020 the COVID-19 epidemic swept across the world. In the face of the huge impact of the epidemic and the
complex and severe domestic and foreign environments all regions and departments have scientifically
coordinated epidemic prevention and control and economic and social development and our country has taken the
lead in breaking out of the haze of the epidemic and realized the recovery we rode the wind and waves to move
forward steadily effectively promoted the restoration of production and living order the industrial service
industry continued to rebound investment and consumption continued to improve and the national economy
continued to recover steadily. Overall the annual gross domestic product increased by 2.3% over the previous
year.31
Under the influence of the COVID-19 epidemic the consumer-led gold and jewellery industry has been greatly
impacted and many economic activities have basically stagnated. Compared with the weakness of foreign gold
markets China's gold market stood out in 2020 the gold hedging and anti-inflation functions continued to be
sought after and gold trading volume and gold ETF holdings continued to increase. In terms of silver global
silver production was expected to be 27700 tons in 2020. As of the end of November 2020 silver futures at the
Shanghai Futures Exchange had a total of 320 million transactions during the year making it one of the world's
largest and most active silver futures. In terms of platinum due to the impact of the epidemic the demand and
supply of platinum fell by 19% and 35% respectively in the second quarter of 2020 supply and demand were
expected to enter a shortage with a gap of 336000 ounces (10.5 tons). In terms of diamonds global demand for
rough diamonds steadily increased in 2020 and retail sales in mainland China performed well due to changes in
consumer concepts the demand for special-shaped diamonds and colored diamonds in the Chinese consumer
market have increased. In terms of colored gemstones our country's colored gemstone market has steadily
increased in recent years with an average annual compound growth rate of 5%. In terms of pearls domestic pearl
production decreased in 2020 the price of mid- and low-end pearls slightly decreased and the sales of pearl
jewellery have shrunk. The scale of production and sales brand building and standard building innovation
capability and public service platform construction of the Shenzhen gold and jewelry manufacturing industry are
in a leading position in the national jewelry industry. Shenzhen's jewelry industry has formed a complete
industrial chain and presents a development trend integrating R&D and design manufacturing exhibition and
trading and tourism culture. However it is facing problems such as insufficient motivation for continuous
innovation and insufficient reserves of high-end professionals. The impact of the COVID-19 epidemic will
continue to give birth to new industry formats.(ii) Development strategy
Since formulated the strategic plan for transforming into a third-party integrated operation service provider in the
jewelry industry in 2014 Tellus has been steadily pushing forward its strategy in accordance with the established
strategy. After years of exploration and experimentation substantial results have been achieved. In the future the
company will continue to deepen our jewellery third-party service platform to promote the industrial upgrading
and enhance production capacity and efficiency.
1. The third party operation service of jewelry
The company will continue to deepen the expansion of third-party services for jewelry and strive to build the
most influential third-party comprehensive service provider in the domestic jewelry and jade industry.
Continue to improve the comprehensive operation and supporting service capabilities of the Jewelry Industrial
Park. Tellus Jewelry Building will continue to adjust and upgrade jewelry business categories based on the
development trend of the jewelry industry; accelerate the exploration of value-added services to further enhance
the supporting service capabilities for enterprises in the jewelry industry park; promote the integration of
resources for enterprises in the building and establish merchant stickiness; play the important value of Tellus
Jewelry Building as a physical platform that carries the strategic transformation of Tellus into a third-party
comprehensive service provider for the jewelry industry.Further expand the supply chain services of the jewelry industry. Promote Tellus Treasury Supply Chain Company
to develop safe deposit box business and build a third-party value-added service platform for the jewelry industry
that integrates precious metal storage gold and diamond supply chain services and third-party safe deposit boxes.Innovatively develop the business of Shenzhen jewelry companies. Provide bonded display bonded warehousing
customs declaration logistics settlement and other services and finally build a comprehensive element trading
service platform with international influence integrating jewelry and diamond raw materials and finished products
display spot trading testing identification design processing e-commerce financial services and insurance.Promote the construction of a base for innovation and entrepreneurship. Strengthen operation and management
innovation establish a mechanism suitable for the development and growth of innovative and entrepreneurial
teams develop creative design and high-end talent training business unite with leading companies in Shuibei rely
on colleges and universities in Shenzhen and establish innovative and creative design colleges so as to cultivate
high-end talents in jewellery and jade that are market-oriented and in line with international fashion.
2. Resource asset business
Resource asset management is an important business section of the company which provides the company with a
stable cash flow. The company will continue to strengthen the management and operation of resource assets by
means of transformation revitalization upgrading and innovative operation and with the help of market-oriented
operations to expand the profitability and economic benefits of resource assets.
3. Auto service business
Persist in optimizing automobile sales and aftermarket services with the development goal of becoming a
comprehensive supplier to provide consumers with diverse automobile products and service solutions and focus
on the development of automobile retail services automobile trade services and automobile aftermarket services.Make full use of the company's existing business foundation give play to the own properties and geographical
advantages build an industrial brand and accelerate the extension and added value of auto parts maintenance and
testing services.(iii) The company's 2021 annual business plan
In 2021 the company will seize the opportunity for in-depth adjustment of the jewelry industry deepen the
expansion of third-party services for jewelry practice the Tellus spirit of "fair diligent hardworking and
practical" and promote the formation of a team of strugglers that work together with one will.
1. Jewelry third-party business:
(1) Shenzhen Jewelry Company: Provide efficient and convenient one-stop full-chain services and realize
value-added services to create revenue.
(2) Treasury Supply Chain Company: Focus on the bonded platform develop and optimize the compliant supply
chain innovation business and provide high-end safe deposit box services above the standard.
(3) Innovation and Entrepreneurship Base: Improve the design and creativity development and innovation and
entrepreneurship incubation service system realize the smooth acceptance of the innovation and entrepreneurship
base; accelerate project cultivation.
2. Commercial operation management business:
(1) Tellus Jewelry Building: Optimize the own commercial management and operation system improve overall
commercial management efficiency and maintain a good market competitive advantage; build a professional
service operation model to increase brand premiums.
(2) Tellus Home Life Experience Hall: High-quality operation to broaden brand awareness.
(3) Tellus Jinzhuan Trading Building: The Phase I and Phase II will be linked to optimize the positioning and
investment plan.
3. Auto service business: On the basis of maintaining the stable scale of auto sales and service business
continuously optimize the management and business model and actively explore new models of auto incremental
business.
4. Tellus Jinzhuan Trading Building construction project and renovation project:
(1) Tellus Jinzhuan Trading Building project: Proceed steadily according to the plan and complete the capping of
the main building before the end of 2021.
(2) Urban Renewal Project in Buxin Industrial Zone: Actively promote the approval of the implementation of
urban renewal.
5. Improve the "14th Five-Year" strategic plan and track the strategic decomposition
Aim at the formulation of the "14th Five-Year" strategic plan decompose targets analyze business data focus on
strategic priorities and improve work efficiency.
6. Improve the talent echelon construction system and comprehensively enhance the quality of talent training
(1) Ensure the effective supply of talents and increase the training of reserve talents and successors.
(2) Establish a sound talent training system formulate personal learning maps and optimize training methods.
(3) Continue to optimize the salary performance management system to achieve differentiated salary targeted
assessment and market exit for talents.(iv) Possible risks and countermeasures
In the process of strategy implementation and project operation we will objectively and clearly recognize the
possible risks and take active and effective measures to prevent them.
1. Risks from fluctuations in the macroeconomic situation
Affected by factors such as domestic and foreign epidemics and financial deleveraging our country's economy
has entered a period of speed adjustment domestic economic growth has slowed and pressure on industrial
structure adjustment has increased. In early 2021 the impact of the COVID-19 epidemic has not yet been
eliminated and it will still impact economic development in the short term. The overall economic environment
has an uncertain impact on the company's operations.In response to this risk the company will actively take various preventive measures. Firstly continue to
strengthen management improve efficiency through scientific management tap the potential to increase revenue
and comprehensively improve the profitability of the original business; secondly promote the implementation of
projects expand the incremental market and expand the business scale look for new profit growth points and
provide a good foundation for the company’s long-term stable development.
2. Risks caused by strategic decomposition and project implementation
In recent years the company has made every effort to advance its transformation strategy goals and several
strategic projects have been implemented. However in the process of entering the industry in depth the company
has become more and more aware of the various difficulties and risks it will face. Brand-new business models
technical characteristics supply and demand relationships customer needs risk factors human resource
requirements how to identify technological development capabilities how to meet changing market needs and
how to take the path of innovation and development in the market are all new challenges that the company
urgently needs to solve which put forward higher requirements for the company's resource integration capabilities
project management capabilities and professional talent reserves in the company's new business layout.In response to this risk on the one hand the company will continue to strengthen its belief in transformation
follow the established overall development strategy and business strategy fully demonstrate make prudent
decision-making fine management and market-oriented operation to ensure that strategic projects obtain good
investment returns and actively respond to market competition; on the other hand the company will steadily
promote reform and innovation and take advantage of the completion of the "Double Hundred Action" to explore
and improve the company's long-term incentive mechanism mobilize the enthusiasm of all employees improve
corporate management and operating efficiency and effectively enhance the core competitiveness of the company.X. Reception of research communication and interview
1. In the report period reception of research communication and interview
□ Applicable √Not applicable
No reception of research communication and interview in the Period
Section V. Important Events
I. Profit distribution plan of common stock and capitalizing of common reserves plan
Formulation Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy during
the Reporting Period
√Applicable □Not applicable
The company attaches great importance to the reasonable returns for investors; the Articles of Association clearly
defines the standards and proportions of cash dividends the decision-making procedures and mechanisms and the
form of profit distribution. The company strictly complies with the Articles of Association and the resolutions of
the shareholders' general meeting the dividends standards and proportions are clear relevant decision-making
procedures and mechanisms are complete the independent directors are responsible and give play to their duties
the medium and small shareholders have the opportunities to express their opinions and demands and the
legitimate rights and interests of medium and small shareholders are fully maintained.Special description on cash dividend policy
Whether it meets the requirements of the Article of Association
or the Resolution of the General Meeting (Y/N):
Y
Whether the bonus standards and proportion is clear and
well-defined (Y/N):
Y
Whether has a completed relevant decision-making procedures
and mechanism (Y/N):
Y
Whether independent directors fulfill duties and play a due role
(Y/N):
Y
Minority shareholders whether has opportunity of full
expression and appeals the legal interest of the minority are
being protected totally (Y/N):
Y
As for the adjustment and change of cash bonus policy the
condition and procedures whether meets regulations and
transparent (Y/N):
Y
Distribution plan (pre-plan) for common stock dividends capitalization scheme of capital reserve (pre-plan) in latest three years
(including this period)
Profit distribution plan for year of 2018 are: carry out 4.5 additional shares for each 10 shares held by
shareholders are being converted by the capital reserve based on total share capital 297281600 shares on 31st
December 2018. Totally 133776720 shares are converted and the share capital of the Company increased to
431058320 after this conversion
Profit distribution plan for year of 2019 are: Distributed 0.42 yuan cash bonus (including tax) for every 10 shares
held by whole shareholders of the Company based on total share capital 431058320 shares on 31st December
2019 total 8104449.44 yuan are distributed in cash no bonus shares and no public reserve transfer into share
capital.Profit distribution plan for year of 2020 are: Distributed 0.20 yuan cash bonus (including tax) for every 10 shares
held by whole shareholders of the Company based on total share capital 431058320 shares on 31st December
2020 total 8621166.40 yuan are distributed in cash no bonus shares and no public reserve transfer into share
capital.
Cash dividend of common stock in latest three years (including the reporting period)
In RMB
Year for
bonus
shares
Amount for
cash bonus
(tax included)
Net profit
attributable to
common stock
shareholders of
listed company
in consolidation
statement for
bonus year
Ratio of the
cash bonus in
net profit
attributable
to common
stock
shareholders
of listed
company
contained in
consolidation
statement
Proportion
for cash
bonus by
other
ways(i.e.share
buy-backs)
Ratio of the
cash bonus
by other
ways in net
profit
attributable
to common
stock
shareholders
of listed
company
contained in
consolidation
statement
Total cash
bonus
(including
other ways)
Ratio of the
total cash
bonus (other
ways
included) in
net profit
attributable
to common
stock
shareholders
of listed
company
contained in
consolidation
statement
2020 8621166.40 57663828.89 14.95% 0.00 0.00% 8621166.40 14.95%
2019 18104449.44 219669708.47 8.24% 0.00 0.00% 18104449.44 8.24%
2018 0.00 86924058.72 0.00% 0.00 0.00% 0.00 0.00%
The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent Company is
positive but no plan of cash dividend proposed of common stock
□Applicable √Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
√Applicable □Not applicable
Bonus shares for every 10-share (Share) 0
Dividends for every 10-share (RMB) (Tax
included)
0.20
Shares transferred from every 10 shares (Share) 0
Equity base of distribution plan (Share) 431058320
Cash bonus distribution (RMB) (Tax included) 8621166.40
Cash bonus distribution in other ways (i.e. share
buy-backs) (RMB)
0.00
Total cash bonus (including other ways) (RMB) 8621166.40
Distributable profits (RMB) 187380544.20
Ratio of total cash dividend (other ways
included) in total profit distribution
100%
Cash dividend
If the Company’s development stage is in the growth period and there is a major capital expenditure arrangement the minimum
proportion of cash dividend in the profit distribution should be 20%
Explanation on profit distribution or capitalizing of capital reserves
Profit distribution plan for year of 2020 is: Distributed 0.20 yuan cash bonus (including tax) for every 10 shares held by whole
shareholders of the Company based on total share capital 431058320 shares on 31st December 2020 total 8621166.40 yuan are
distributed in cash no bonus shares and no public reserve transfer into share capital.III. Implementation of commitment
1. Commitments that the actual controller shareholders related party buyers and the Company have
fulfilled during the reporting period and have not yet fulfilled by the end of reporting period
√Applicable □Not applicable
Commitment
s
Commi
tment
party
Type of
commitme
nts
Content of commitments Commitment date
Commitm
ent term
Implemen
tation
Commitment
s for share
merger
reform
Commitment
s in report of
acquisition or
equity
change
Commitment
s in assets
reorganizatio
n
Commitment
s make in
initial public
offering or
Shenzh
en
Tellus
Holdin
g Co.
Other
The commitments to the fulfillment of
information disclosure about the Company
business development are as follows: except
for the information has been disclosed
publicly the Company has not had the
2014-10-1
7
Long-term
Implemen
ting
re-financing Ltd. disclosed information about asset acquisition
and business development that has not been
disclosed within one year. In the future the
Company shall timely accurately and
adequately disclose the relevant information
according to the progress of new business and
the related requirements.
Equity
incentive
commitment
Other
commitments
for medium
and small
shareholders
Shenzh
en
Special
Develo
pment
Group
Co.
Ltd.Horizontal
Competiti
on
In order to avoid the horizontal competition
the Company’s controlling shareholderShenzhen SDG has issued the “commitmentletter about the avoidance of horizontalcompetition” on May 26 2014. The full
commitment letter is as follows: 1. The
Company and other enterprises controlled by
the Company except Tellus Group haven’t
occupied in any business that could
substantially compete with the main
businesses of Tellus Group and have no
horizontal competition relationship with
Tellus Group.
2014-05-2
6
Long-term
Implemen
ting
Shenzh
en
Tellus
Holdin
g Co.
Ltd.
Dividend
commitme
nt
From 2020 to 2022 the Company’s profits
will first be used to cover the losses of
previous years; after making up for losses of
previous years in the premise that the
Company’s profits and cash flow can meet the
Company's normal operations and long-term
development reward shareholders the
Company will implement positive profit
distribution approaches to reward the
shareholders details are as follows: 1. The
Company’s profit distribution can adopt cash
stock or the combination of cash and stock or
other methods permitted by law. The foreign
currency conversion rates of domestically
listed foreign shares dividend are calculated
according to the standard price of HK dollar
against RMB announced by People's Bank of
China on the first working day after the
resolution date of the shareholders' meeting.The Company prefers to adopt the cash
2021-04-2
4
2022-12-3
1
Implemen
ting
dividends to distribute profits. In order to
maintain the adaptability between capital
expansion and performance growth in the
premise of ensuring the full cash dividend
distributions and the rationality of equity scale
and equity structure the Company can adopt
the stock dividend methods to distribute
profits. 2. According to the "Company Law"
and other relevant laws and the provisions of
the Company’s "Articles of Association"
following conditions should be satisfied when
the Company implements cash dividends: (1)
the Company's annual distributable profits
(i.e. the after-tax profits after making up for
losses and withdrawing accumulation funds)
are positive value the implementation of cash
dividends will not affect the Company's
subsequent continuing operations; (2) the
audit institution issues the standard audit
report with clean opinion to the Company's
annual financial report; (3) the Company has
no significant investment plans or significant
cash outlay (except for fund-raising projects).Major investment plans or significant cash
outlay refer to: the accumulated expenditures
the Company plans to used for investments
abroad acquisition of assets or purchase of
equipment within the next 12 months reach or
exceed 30% of the net assets audited in the
latest period. 3. In the premise of meeting the
conditions of cash dividends and ensuring the
Company’s normal operation and long-term
development the Company makes cash
dividends once a year in principle the
Company’s board of directors can propose the
Company to make interim cash dividends in
accordance with the Company's profitability
and capital demand conditions. The
proportion of cash dividends in profits
available for distribution and in distribution of
profits should meet the following
requirements: (1) in principle the Company’s
profits distributed in cash every year should
not be less than 10% of profit available for
distribution realized in the same year and the
Company’s profits accumulatively distributed
in cash in the last three years should not be
less than 30% of the annual average profit
available for distribution realized in the last
three years. (2) if the Company’s development
stage belongs to mature stage and there is no
significant capital expenditure arrangement
when distributing profits the minimum
proportion of cash dividends in this profit
distribution should be 80%; (3) if the
Company’s development stage belongs to
mature stage and there are significant capital
expenditure arrangements when distributing
profits the minimum proportion of cash
dividends in this profit distribution should be
40%; (4) if the Company’s development stage
belongs to growth stage and there are
significant capital expenditure arrangements
when distributing profits the minimum
proportion of cash dividends in this profit
distribution should be 20%; when the
Company's development stage is not easy to
be differed but there are significant capital
expenditure arrangements please handle
according to the preceding provisions. 4. On
the condition of meeting the cash dividend
distribution if the Company's operation
revenue and net profit grow fast and the
board of directors considers that the
Company’s equity scale and equity structure
are reasonable the Company can propose and
implement the dividend distribution plans
except proposing the cash dividend
distribution plans. When allocating stock
dividend every time the stock dividend per 10
shares should be no less than 1 share. Stock
allocation can be implemented individually or
in combination of cash dividends. When
confirming the exact amount of profit
distribution by stock the Company should
fully consider if the general capital after profit
distribution by stock matches with the
Company’s current operation scale and profit
growth rate and consider the impact on future
financing so as to make sure the allocation
plans meet the overall interests of all
shareholders.
Completed
on time(Y/N)
Y
As for the
commitment
out of the
commitment
time explain
the specific
reasons and
further plans
Not applicable
2. Concerning assets or project of the Company which has profit forecast and reporting period still in
forecasting period explain reasons of reaching the original profit forecast
□Applicable √Not applicable
IV. Non-operational fund occupation from controlling shareholders and its related party
□Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
V. Explanation from Board of Directors Supervisory Committee and Independent Directors
(if applicable) for “Qualified Opinion” that issued by CPA
□Applicable √Not applicable
VI. Particulars about the changes in aspect of accounting policy estimates and calculation
method compared with the financial report of last year
√Applicable □Not applicable
Since January 1 2020 the Company has implemented the revised Accounting Standards for Business Enterprises No.14- Revenue.
Found more in the Company’s “Auditing Report 2020” disclosed on www.cninfo.com.cn on the same day Note III to the Financial
Statements “Major Accounting Policies and Accounting Estimates” -31. “Changes in Important Accounting Policies and Accounting
Estimates”
VII. Major accounting errors within reporting period that needs retrospective restatement
□Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.VIII. Compare with last year’s financial report; explain changes in consolidation statement’s
scope
√ Applicable □Not applicable
Totally 16 enterprises included in consolidate statement for year of 2020 found more in the VI. Change of Consolidate Scope carry
in the annotation of financial statement in Auditing Report 2020 released on Juchao Website on the same date.IX. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
Name of domestic accounting firm
RSM Certified Public Accountants (Special General
Partnership)
Remuneration for domestic accounting firm (in 10 thousand
Yuan)
70.50
Continuous life of auditing service for domestic accounting
firm
1
Name of domestic CPA Li Qiaoyi Qin Changming
Continuous life of auditing service for domestic accounting
firm
Li Qiaoyi-1 Qin Changming-2
Re-appointed accounting firms in this period
√ Yes □ No
Whether to change the accounting firm during the audit period
□ Yes √ No
Whether the change of accounting firm meets the approval procedure
√ Yes □ No
Detailed description of the re-appointed change of accounting firm
The company’s former auditing firm Pan-China Certified Public Accountants (LLP) (hereinafter referred to as “Pan-China CPA”)
adhered to the principle of independent auditing in its practice fairly and independently issued audit opinions objectively fairly and
accurately reflected the company’s financial situations and internal controls and effectively fulfilled the responsibilities of the audit
institution.In view of the expiry of the term of appointment of Pan-China CPA the company intends not to engage Pan-China CPA as the
financial auditor for year of 2020 and has communicated with Pan-China CPA in advance regarding termination and related matters.The company expresses its sincere gratitude to Pan-China CPA and its team for their diligence conscientiousness and good service
during the provision of audit services.
According to the company’s business development and future audit needs after careful consideration the company intends to
appointed RSM Certified Public Accountants (Special General Partnership) as the company’s financial audit and internal control
audit institution for 2020 with a term of one year and the financial audit fee of 500000 yuan and the internal control audit cost of
205000 yuan a total of 705000 yuan.
Appointment of internal control auditing accounting firm financial consultant or sponsor
√Applicable □ Not applicable
The Company appointed RSM Certified Public Accountants (Special General Partnership) as the internal control audit accounting
firm of the Company for year of 2020 with internal control audit of 205000 yuan.X. Particular about delisting after annual report disclosed
□Applicable √Not applicable
XI. Bankruptcy reorganization
□Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting period
XII. Significant lawsuits and arbitration of the Company
√ Applicable □ Not applicable
Found more in the Company’s “Auditing Report 2020” disclosed on www.cninfo.com.cn on the same day Note 11. Commitments or
contingency to the Financial Statements
XIII. Penalty and rectification
□Applicable √ Not applicable
No penalty and rectification for the Company in reporting period.XIV. Integrity of the Company and its controlling shareholders and actual controllers
?Applicable √ Not applicable
XV. Implementation of the Company’s stock incentive plan employee stock ownership plan
or other employee incentives
□Applicable √ Not applicable
During the reporting period the Company has no stock incentive plan employee stock ownership plan or other employee incentives
that have not been implemented.XVI. Major related transaction
1. Related transaction with routine operation concerned
√Applicable □Not applicable
Related
party
Relati
onshi
p
Type
of
relate
d
transa
ction
Conte
nt of
relate
d
transa
ction
Pricin
g
princi
ple
Related
transacti
on price
Related
transact
ion
amount
(in 10
thousan
d Yuan)
Propo
rtion
in
simila
r
transa
ctions
Trading
limit
approve
d (in 10
thousan
d Yuan)
Whet
her
over
the
appro
ved
limite
d or
not
(Y/N)
Cleari
ng
form
for
relate
d
transa
ction
Availab
le
similar
market
price
D
at
e
o
f
d
is
cl
o
s
u
r
e
I
n
d
e
x
o
f
d
is
c
l
o
s
u
r
e
Shenzh
en
Zung
Fu
Tellus
Auto
Service
Co.
Ltd.
Direct
or
super
visor
and
senior
execu
tives
of the
Comp
any
serves
direct
or of
the
enterp
rise
Routi
ne
relate
d
transa
ction
Offeri
ng
proper
ty
renal
Refer
ence
marke
t
pricin
g
385.71 385.71 2.73% 540 N
Agree
d by
contra
ct or
agree
ment
385.71
Shenzh
en SDG
Tellus
Propert
y
Manage
Subsi
diary
of the
contro
lling
share
Routi
ne
relate
d
transa
ction
Offeri
ng
proper
ty
renal
Refer
ence
marke
t
pricin
g
4.48 4.48 0.03% 14 N
Agree
d by
contra
ct or
agree
ment
4.48
ment
Co.
Ltd.holder
Shenzh
en SDG
Petty
Loan
Co.
Ltd.Subsi
diary
of the
contro
lling
share
holder
Routi
ne
relate
d
transa
ction
Offeri
ng
proper
ty
renal
and
manag
ement
servic
e
Refer
ence
marke
t
pricin
g
113.70 113.70 0.80% 113.70 N
Agree
d by
contra
ct or
agree
ment
113.70
Jewelry
Park
Branch
of
Shenzh
en SDG
Service
Co.
Ltd.Sub-s
ubsidi
ary of
contro
lling
share
holder
Routi
ne
relate
d
transa
ction
Offeri
ng
proper
ty
renal
Refer
ence
marke
t
pricin
g
180.11 180.11 1.27% 180 Y
Agree
d by
contra
ct or
agree
ment
180.11
Shenzh
en SDG
Engine
ering
Manage
ment
Co.
Ltd
Subsi
diary
of the
contro
lling
share
holder
Routi
ne
relate
d
transa
ction
Accep
t
engine
ering
superv
ision
servic
e
Refer
ence
marke
t
pricin
g
83.89 83.89 1.43% 43 Y
Agree
d by
contra
ct or
agree
ment
83.89
Jewelry
Park
Branch
of
Shenzh
en SDG
Service
Co.
Ltd.Sub-s
ubsidi
ary of
contro
lling
share
holder
Routi
ne
relate
d
transa
ction
Accep
t
servic
es
such
as
clean
greeni
ng and
transf
ormati
on
Refer
ence
marke
t
pricin
g
104.62 104.62 1.79% 36 Y
Agree
d by
contra
ct or
agree
ment
104.62
Shenzh Subsi Routi Accep Refer 1440.30 1440.3 24.58 1570 N Agree 1440.3
en SDG
Tellus
Propert
y
Manage
ment
Co.
Ltd.diary
of the
contro
lling
share
holder
ne
relate
d
transa
ction
t
proper
ty
manag
ement
servic
es
ence
marke
t
pricin
g
% d by
contra
ct or
agree
ment
0
Total -- --
2312.8
1
-- 2523 -- -- -- -- --
Detail of sales return with major
amount involved
N/A
Report the actual implementation of
the daily related transactions which
were projected about their total
amount by types during the
reporting period (if applicable)
Performing normally
Reasons for major differences
between trading price and market
reference price
Not applicable
2. Related transactions by assets acquisition and sold
□Applicable √ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period.
3. Main related transactions of mutual investment outside
□Applicable √ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period.
4. Contact of related credit and debt
√Applicable □Not applicable
Whether the Company had non-operating contact of related credit and debt
√ Yes □ No
Debts payable to related party
Related party
Relationsh
ip
Causes
Balance at
period-beg
in (10
thousand
Yuan)
Current
newly
added
(10
thousand
Current
recovery
(10
thousand
Yuan)
Interest
rate
Current
interest
(10
thousand
Yuan)
Balance at
period-end
(10
thousand
Yuan)
Yuan)
Shenzhen
Special
Development
Group Co.Ltd.
Controllin
g
shareholde
rs
Loan
principal
for Hurari
Company
1738 6 1 6 1743
Shenzhen
Special
Development
Group Co.Ltd.
Controllin
g
shareholde
rs
Loan
principal
for Hurari
Company
300 300 0
Impact on operation results
and financial status
Total profit decreased 60000 Yuan due to the interest expenses increased in the Year
5. Other major related transactions
□Applicable √Not applicable
No other major related transaction in Period
XVII. Significant contract and implementations
1. Trusteeship contract and leasing
(1) Trusteeship
□Applicable √Not applicable
No trusteeship for the Company in reporting period
(2) Contract
□Applicable √ Not applicable
No contract for the Company in reporting period
(3) Leasing
□Applicable √ Not applicable
No leasing for the Company in reporting period
2. Major guarantees
√Applicable □Not applicable
(1) Guarantees
In 10 thousand Yuan
Particulars about the external guarantee of the Company and its subsidiary (Barring the guarantee for subsidiaries)
Name of the
Company
guaranteed
Related
Announc
ement
disclosur
e date
Guarante
e limit
Actual date of
happening
Actual
guarantee
limit
Guarantee
type
Guarantee
term
Implem
ented
(Y/N)
Guaran
tee for
related
party
(Y/N)
Shenzhen Zung Fu
Tellus Auto Service
Co. Ltd.
2014-09-
30
3500 2007-04-17 3500 Pledged
To the
expire date
of joint
venture
contract
N Y
Total approving external
guarantee in report period (A1) 0
Total actual occurred
external guarantee in
report period (A2)
3500
Total approved external
guarantee at the end of report
period ( A3)
3500
Total actual balance of
external guarantee at the
end of report period
(A4)
3500
Guarantee of the Company for subsidiaries
Name of the
Company
guaranteed
Related
Announc
ement
disclosur
e date
Guarante
e limit
Actual date of
happening
Actual
guarantee
limit
Guarantee
type
Guarantee
term
Implem
ented
(Y/N)
Guaran
tee for
related
party
(Y/N)
Total amount of approving
guarantee for subsidiaries in
report period (B1)
0
Total amount of actual
occurred guarantee for
subsidiaries in report
period (B2)
0
Total amount of approved
guarantee for subsidiaries at the
end of reporting period (B3)
0
Total balance of actual
guarantee for subsidiaries
at the end of reporting
period (B4)
0
Guarantee of the subsidiaries for subsidiaries
Name of the
Company
guaranteed
Related
Announc
ement
disclosur
e date
Guarante
e limit
Actual date of
happening
Actual
guarantee
limit
Guarantee
type
Guarantee
term
Implem
ented
(Y/N)
Guaran
tee for
related
party
(Y/N)
Total amount of approving
guarantee for subsidiaries in
report period (C1)
0
Total amount of actual
occurred guarantee for
subsidiaries in report
period (C2)
0
Total amount of approved
guarantee for subsidiaries at the
end of reporting period (C3)
0
Total balance of actual
guarantee for subsidiaries
at the end of reporting
period (C4)
0
Total amount of guarantee of the Company (total of three above mentioned guarantee)
Total amount of approving
guarantee in report period
(A1+B1+C1)
0
Total amount of actual
occurred guarantee in
report period
(A2+B2+C2)
3500
Total amount of approved
guarantee at the end of report
period (A3+B3+C3)
3500
Total balance of actual
guarantee at the end of
report period
(A4+B4+C4)
3500
Total actual guarantees (A4+B4+C4) as a percentage of the
Company’s net assets
2.67%
Including:
Amount of guarantee for shareholders actual controller and its
related parties (D) 0
The debts guarantee amount provided for the guaranteed parties
whose assets-liability ratio exceed 70% directly or indirectly
(E)
0
Proportion of total amount of guarantee in net assets of the
Company exceed 50% (F) 0
Total amount of the aforesaid three guarantees (D+E+F) 0
Explanations on possibly bearing joint and several liquidating
responsibilities for undue guarantees (if applicable) N/A
Explanations on external guarantee against regulated
procedures (if applicable) N/A
Explanation on guarantee with composite way
Nil
(2) Guarantee outside against the regulation
□Applicable √Not applicable
No guarantee outside against the regulation in Period.3. Entrust others to cash asset management
(1) Trust financing
√Applicable □Not applicable
Trust financing in the reporting period
In 10 thousand Yuan
Type Capital resources Amount for entrust Balance un-expired Overdue amount
Bank financing
product
Own funds 159078 31322 0
Total 159078 31322 0
Details of the single major amount or high-risk trust investment with low security poor fluidity and non-guaranteed
□Applicable √Not applicable
Entrust financial expected to be unable to recover the principal or impairment might be occurred
□Applicable √Not applicable
(2) Entrusted loans
□Applicable √ Not applicable
The Company had no entrusted loans in the reporting period.
4.Significant contracts for day-to-day operations
□Applicable √ Not applicable
5. Other significant contracts
□Applicable √ Not applicable
No other significant contracts for the Company in reporting period
XVIII. Social responsibility
1. Fulfill social responsibility
The Company has always taken the shareholders’ return employees’ achievements and social feedback as its
own duty. We adheres to the principle of fairness and actively safeguards the legitimate rights and interests of
shareholders; actively advocates achieving the self-worth while realizing the enterprise value and creates a
working environment that the enterprise cares for employees and employees love the enterprise so as to have a
harmonious development together; actively returns to the society and the public and commits itself to achieve the
harmonious and sustainable development of the Company and society.(ii)Performance of taking targeted measures in poverty alleviation
1.Precise poverty alleviation planning
The company fully implements the general requirements of the closing battle against poverty fulfilled the role of
state-owned enterprises and flexible carried out various assistance work to combat the poverty.
2.Summary of the annual precise poverty alleviation
During the reporting period the company digest agricultural and sideline products in poor areas by means of
purchase instead of donation and opens up sales channels for agricultural products by means of consumption and
support and strongly promote the economic upgrading of poor areas with practical actions.
3.follow-up precise poverty alleviation
The company will continue to digest the agricultural and sideline products from poor areas through purchase in
lieu of donation and takes concrete actions to promote the economic improvement in poor areas and lift poor
people out of poverty.(iii) Environmental protection
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department
□ Yes √No
The company and its subsidiaries are not among the key emission units announced by the environmental protection authorities.XIX. Explanation on other significant events
□Applicable √ Not applicable
XX. Significant event of subsidiary of the Company
□Applicable √Not applicable
Section VI. Changes in Shares and Particulars about Shareholder
I. Changes in Share Capital
1. Changes in Share Capital
In Share
Before change Increase/decrease in this time (+ - ) After change
Amount Ratio
New
share
s
issue
d
Bonu
s
share
Capitali
zation
of
public
reserve
Othe
r
Sub
tota
l
Amount Ratio
I. Restricted shares 0 0.00% 0 0 0 0 0 0 0.00%
1. State holding 0 0.00% 0 0 0 0 0 0 0.00%
2. State-owned corporation
shares
0 0.00% 0 0 0 0 0 0 0.00%
3. Other domestic shares 0 0.00% 0 0 0 0 0 0 0.00%
Including: domestic legal
person’s shares
0 0.00% 0 0 0 0 0 0 0.00%
Domestic natural
person’s shares
0 0.00% 0 0 0 0 0 0 0.00%
4. Foreigner’s shares 0 0.00% 0 0 0 0 0 0 0.00%
Including: foreign
corporation shares
0 0.00% 0 0 0 0 0 0 0.00%
Foreign natural
person’s shares
0 0.00% 0 0 0 0 0 0 0.00%
II. Un-restricted shares 431058320 100.00% 0 0 0 0 0 431058320
100.00
%
1. RMB ordinary shares 392778320 91.12% 0 0 0 0 0 392778320 91.12%
2. Domestically listed
foreign shares
38280000 8.88% 0 0 0 0 0 38280000 8.88%
2. Foreign shares listed
aboard
0 0.00% 0 0 0 0 0 0 0.00%
3. Other 0 0.00% 0 0 0 0 0 0 0.00%
III. Total shares 431058320 100.00% 0 0 0 0 0 431058320
100.00
%
Reasons for share changed
□Applicable √Not applicable
2. Changes of restricted shares
□Applicable √ Not applicable
II. Securities issuance and listing
1. Security offering (without preferred stock) in Reporting Period
□Applicable √Not applicable
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and
liability structure
□Applicable √Not applicable
3. Current internal staff shares
□Applicable √ Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
In Share
Total
common
stock
shareholders
in reporting
period-end
48827
Total common
stock
shareholders at
end of last
month before
annual report
disclosed
47794
Total preference
shareholders with
voting rights
recovered at end of
reporting period (if
applicable) (found
in note 8)
0
Total
preference
shareholders
with voting
rights
recovered at
end of last
month before
annual report
disclosed (if
applicable)
(found in
note 8)
0
Particulars about shares held above 5% by shareholders or top ten shareholders
Full name of
Shareholders
Nature of
shareholder
Proporti
on of
Total
shareholders
Changes in
report period
Amo
unt of
Amount of
un-restricted
Number of share
pledged/frozen
shares
held
at the end
of report
period
restri
cted
share
s held
shares held
State of
share
Amount
Shenzhen
Special
Development
Group Co. Ltd.State-owned
corporation
49.09% 211591621 0 0 211591621 0
Shenzhen
Capital Fortune
Jewelry Industry
Investment
Enterprise (LP)
Domestic
non
state-owned
corporate
14.77% 63655372 -13441499 0 63655372 0
GUOTAI
JUNAN
SECURITIES(H
ONGKONG)
LIMITED
Foreign
corporation
0.40% 1736091 0 0 1736091 0
Hong Kong
Securities
Clearing
Company Ltd.
Foreign
corporation
0.27% 1154905 351，557 0 1154905 0
CCB-GF CSI All
Index Auto
index-based
Originated
Securities
Investment Fund
Other 0.22% 942238 942238 0 942238 0
Shanghai
Yingshui
Investment
Management
Co. Ltd. -
Yingshui
Dongfeng
No.3-Private
Equity
Investment Fund
Other 0.13% 566487 566487 0 566487 0
Shen Zuowei
Domestic
nature
person
0.12% 516485 516485 0 516485 0
Cinda Securities State-owned 0.12% 510000 156681 0 510000 0
Co. Ltd. corporation
Yang Jianfeng
Domestic
nature
person
0.12% 504200 504200 0 504200 0
Yao Zhenming
Domestic
nature
person
0.11% 475200 475200 0 475200 0
Strategy investors or general
corporation comes top 10
shareholders due to rights issue
(if applicable) (see note 3)
Not applicable
Explanation on associated
relationship among the top ten
shareholders or consistent action
Among the top ten shareholders there exists no associated relationship between the
state-owned legal person’s shareholders SDG Ltd and other shareholders and they do not
belong to the persons acting in concert regulated by the Management Measure of Information
Disclosure on Change of Shareholding for Listed Companies. For the other shareholders of
circulation share the Company is unknown whether they belong to the persons acting in
concert.
Description of the above
shareholders in relation to
delegate/entrusted voting rights
and abstention from voting
rights.Not applicable
Particular about top ten shareholders with un-restrict shares held
Shareholders’ name Amount of un-restrict shares held at Period-end
Type of shares
Type Amount
Shenzhen Special Development
Group Co. Ltd.
211591621
RMB
ordinary
shares
21159162
1
Shenzhen Capital Fortune
Jewelry Industry Investment
Enterprise (LP)
63655372
RMB
ordinary
shares
63655372
GUOTAI JUNAN
SECURITIES(HONGKONG)
LIMITED
1736091
Domestic
ally listed
foreign
shares
1736091
Hong Kong Securities Clearing
Company Ltd.
1154905
RMB
ordinary
shares
1154905
CCB-GF CSI All Index Auto
index-based Originated
942238
RMB
ordinary
942238
Securities Investment Fund shares
Shanghai Yingshui Investment
Management Co. Ltd. -
Yingshui Dongfeng No.3-Private
Equity Investment Fund
566487
RMB
ordinary
shares
566487
Shen Zuowei 516485
RMB
ordinary
shares
516485
Cinda Securities Co. Ltd. 510000
RMB
ordinary
shares
510000
Yang Jianfeng 504200
RMB
ordinary
shares
504200
Yao Zhenming 475200
RMB
ordinary
shares
475200
Expiation on associated
relationship or consistent actors
within the top 10 un-restrict
shareholders and between top 10
un-restrict shareholders and top
10 shareholders
Among the top ten shareholders there exists no associated relationship between the
state-owned legal person’s shareholders SDG Ltd and other shareholders and they do not
belong to the persons acting in concert regulated by the Management Measure of Information
Disclosure on Change of Shareholding for Listed Companies. For the other shareholders of
circulation share the Company is unknown whether they belong to the persons acting in
concert.
Explanation on shareholders
involving margin business about
top ten common shareholders
with un-restrict shares held(if
applicable) (see note 4)
The shareholder Shanghai Yingshui Investment Management Co. Ltd. - Yingshui Dongfeng
No.3-Private Equity Investment Fund holds 566487 shares of the company's stock through a
credit transaction guarantee securities account and 0 shares of the company's stock through
an ordinary securities account for a total of 566487 shares. The shareholder Yang Jianfeng
holds 372100 shares of the company's stock through a credit transaction guarantee securities
account and 132100 shares of the company's stock through an ordinary securities account
for a total of 504200 shares.Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back
agreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no
buy-back agreement dealing in reporting period.
2. Controlling shareholder of the Company
Nature of controlling shareholders: local state-owned holding
Type of controlling shareholders: legal person
Majority shareholder
Legal
person/person in
charge of the unit
Date of foundation Organization code Main operation business
Shenzhen Special
Development Group Co.
Ltd.Zhang Junlin June 20 1982 91440300192194195C
Investment in industry
(specific item should be
declaration); investment
in tourism industry;
development and
operation of the real
estate; domestic business
material supply and
marketing industry
(excluding monopolized
commodity and
commodity under special
government control);
economic
information(excluding
restricted projects);
import & export business
Equity of listed Company in
and out of China control
and hold by the majority
shareholder in the Period
Except the shares of the Company held by SDG SDG still holds 304722350 shares of Shenzhen
SDG Information Co. Ltd. (Stock name: SDGI Stock code: 000070) a 37.32% takes; holds
7798809 shares of Sichuan Jinlu Group Co. Ltd. (Stock name: Jinlu Group Stock code:
000510) a 1.28% takes; through Shenzhen Capital Fortune Electronic Information Investment
Enterprise (limited partnership) holds 183818073 shares of Shenzhen Microgate Technology
Co. Ltd. (Stock name: Microgate Technology securities code: 300319) with 26.37% takes; holds
48750000 shares of Shenzhen SDG Service Co. Ltd. (Stock name: SDG Service Stock
code:300917) with ultimate beneficiary shares of 48.75%.
Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
The Company had no changes of controlling shareholders in reporting period
3. Actual controller of the Company and persons acting in concert
Nature of actual controller: local state-owned assets management
Type of actual controller: legal person
Actual controlling shareholders
Legal
person/person
in charge of
the unit
Date of
foundation Organization code Main operation business
Shenzhen Municipal People’s
Government State-owned
Assets Supervision and
Administration Commission
Yu Gang July 20 2003
11440300K31728067
2
Not applicable
Equity of domestic/oversea
listed Company control by
actual controller in report
period
Not applicable
Changes of actual controller in reporting period
□ Applicable √ Not applicable
No changes of actual controllers for the Company in reporting period.Property right and controlling relationship between the actual controller and the Company is as follow:
Actual controller controlling the Company by entrust or other assets management
□Applicable √Not applicable
4. Particulars about other legal person shareholders with over 10% shares held
√Applicable □Not applicable
Corporate shareholders
Legal rep./person in
charge of unit
Date of foundation
Register
capital
Main business or
management activity
Shenzhen Capital Fortune
Jewelry Industry Investment
Enterprise (LP)
Cheng Houbo April 18 2014
620 million
Yuan
Equity investment
5. Limitation and reducing the holdings of shares of controlling shareholders actual controllers
restructuring side and other commitment subjects
□Applicable √Not applicable
Section VII. Preferred Stock
□Applicable √ Not applicable
The Company had no preferred stock in the Period.Section VIII. Convertible Bonds
□Applicable √ Not applicable
The Company had no convertible bonds in the Period.Section IX. Particulars about Directors Supervisors Senior
Executives and Employees
I. Changes of shares held by directors supervisors and senior executives
Name Title
Work
ing
status
Sex Age Start dated ofoffice term
End date of
office term
Share
s held
at
period
-begin
(Share
)
Amount
of
shares
increase
d in this
period
(Share)
Amoun
t of
shares
decreas
ed in
this
period
(Share)
Other
chang
es
(share
)
Shares
held at
period-
end
(Share)
Fu
Chunlo
ng
Chairm
an
Curre
ntly
in
office
M 48
September 7
2018
September
6 2021
0 0 0 0 0
Yu Lei Director
Curre
ntly
in
office
F 53 June 6 2012
September
6 2021
0 0 0 0 0
Zhang
Quanxu
n
Director
Curre
ntly
in
office
M 48 May 20 2015
September
6 2021
0 0 0 0 0
Gu
Zhimin
Director
Curre
ntly
M 50
September 7
2018
September
6 2021
0 0 0 0 0
g in
office
Lv
Hang
Director
GM
Curre
ntly
in
office
M 60
September 7
2018
September
6 2021
0 0 0 0 0
Lou
Hong
Director
Curre
ntly
in
office
F 53
February 9
2018
September
6 2021
0 0 0 0 0
Lou
Hong
CFO
Curre
ntly
in
office
F 53
January 4
2018
September
6 2021
0 0 0 0 0
Hu
Yuming
Indepen
dent
director
Curre
ntly
in
office
M 56
September 7
2018
September
6 2021
0 0 0 0 0
Jiang
Dingha
ng
Indepen
dent
director
Curre
ntly
in
office
M 58
September 7
2018
September
6 2021
0 0 0 0 0
Zhang
Dong
Indepen
dent
director
Curre
ntly
in
office
M 47
September 7
2018
September
6 2021
0 0 0 0 0
Guo
Xiaodo
ng
Chairm
an of
the
Supervi
sory
Commit
tee
Curre
ntly
in
office
M 57
September 7
2018
September
6 2021
0 0 0 0 0
Chen
Yangsh
eng
Supervi
sor
Curre
ntly
in
office
M 58 May 4 2017
September
6 2021
0 0 0 0 0
Yang
Jianpin
g
Supervi
sor
Curre
ntly
in
office
F 49
September 7
2018
September
6 2021
0 0 0 0 0
Liu
Haiche
ng
Supervi
sor
Curre
ntly
in
office
F 52
September 7
2018
September
6 2021
0 0 0 0 0
Zhang
Zheng
Supervi
sor
Curre
ntly
in
office
M 37
September 7
2018
September
6 2021
0 0 0 0 0
Tan
Zhong
Deputy
Party
secretar
y
Curre
ntly
in
office
M 53
September 7
2018
September
6 2021
0 0 0 0 0
Feng
Yu
Deputy
GM
Curre
ntly
in
office
M 54 June 17 2006
September
6 2021
0 0 0 0 0
Xie
Jing
Deputy
GM
Curre
ntly
in
office
M 56
October 25
2018
September
6 2021
0 0 0 0 0
Qi
Peng
Secretar
y of the
Board
Curre
ntly
in
office
M 48
December 28
2015
September
6 2021
0 0 0 0 0
Total -- -- -- -- -- -- 0 0 0 0 0
II. Changes of directors supervisors and senior executives
□Applicable √Not applicable
III. Post-holding
Professional background major working experience and present main responsibilities in Company of directors supervisors and
senior executive
Name Main work experience and holding the post
Fu Chunlong
Born in 1973 Master degree senior human resources manager. He ever took the Deputy Team Leader in Work Team
of Shenzhen SDG Huatong Packaging Co. Ltd. Business Deputy General Manager /GM and deputy
director/director of HR Department of Shenzhen SDG Co. Ltd. and supervisor of the Company. Now he is Deputy
GM of Shenzhen SDG Co. Ltd- controlling shareholder of the Company and Supervisor of Shenzhen State-Owned
Dutyfree Commodity (Group) Co. Ltd and Chairman of the Company
Yu Lei Born in 1968 Master degree a certified real estate appraiser and real estate economist. She successively served as
secretary of the international project cooperation department of Beijing Chaoyan Vocation Education Training
Center deputy chief chief and deputy director of Luohu Branch the Bureau of Planning and Land of Shenzhen
Municipality the deputy director and director of State-owned Assets Supervision and Administration Commission of
the People’s Government of Shenzhen Municipality. Now she serves as vice president of the controlling shareholder
of the Company- SDG Chairman of Shenzhen Microgate Technology Co. Ltd. and Director of the Company
Zhang Quanxun
Born in 1973 Master degree he successively served as auditor and project manager in auditing department of
Shenzhen Zhixing CPA Office; the GM assistant of Xiamen Xingdao Feilu Investment Co. Ltd. secretary of the
Board GM assistant and staff director of Fujian Logistics Investment Financing Co. Ltd.; deputy director of Xiamen
Productivity Promotion Center; director of the plastic business department and strategy development department of
Shenzhen Tongchan Package Group and the director of strategy research and merger department of SZ Capital. Now
he serves as deputy president and member of the investment committee of Shenzhen Capital Fortune Investment
Management Co. Ltd. and Director of the Company
Gu Zhiming
Born in 1971 senior gold investment analyst once served as an employee of the business department of Guilin
Wanya Jewellery Co. Ltd. business director of Shenzhen Chenzhixin Jewellery Co. Ltd. business director of the
domestic division of Lukfook Group (International) Co. Ltd. general manager of Shenzhen Jinglon Jewellery Co.Ltd. and Chief Operating Officer of Shenzhen Xingguangda Jewellery Co. Ltd. and currently serves as the deputy
general manager of Shenzhen Yuepeng Gold Jewellery & Gold Co. Ltd. Chairman and CEO of Shenzhen Link Gold
Tec & Co. Ltd. and a director of the Company.Lv Hang
Born in 1961 Master degree a senior political division. He successively served as lecturer and secretary of the
principal of Shenzhen University; the business manager deputy director and director of the office of the Party Dept.of Shenzhen SDG; chairman and GM of Shenzhen SDG Xiaomeisha Tourism Center; Director and GM of Shenzhen
Tellus Holding Co. Ltd; GM of Shenzhen SDG Property Management Co. Ltd. Now served as Deputy Secretary of
the Party Committee director and GM of the Company etc.Lou Hong
Born in 1968 a Bachelor degree and senior account. Used to worked as staff of the financial dept. in Suzhou Silk
Industry Company and in Shenzhen Southeast Silk Co. Ltd.; staff of the accounting & financial dept. of Shenzhen
Special Economic Zone Development (Group) Company and worked in accounting management office; also worked
as deputy GM of Shenzhen SDG Liancheng Real Estate Development Co. Ltd.; manager of the financial dept. of
Shenzhen SDG Investment Co. Ltd.; the business manager and deputy director in accounting & financial dept. of
Shenzhen SDG Group Co. Ltd.; CFO of the Shenzhen SDG Real Estate Co. Ltd. and the deputy director of the
planning financial dept. Of Shenzhen SDG and Director and CFO of the Shenzhen SDG Xiaomeisha Investment
Development Co. Ltd. Currently works as the Director and CFO of the Company.
Hu Yuming
Born in 1965 a doctoral candidate and accounting professor. He successively served as a teaching assistant lecturer
and vice professor of Xiamen University associate professor of the school of management vice director and director
of accounting department of Jinan University the deputy dean of the school of international institute and school of
management of the Jinan University. Now he serves as the professor and doctoral supervisor of school of
management of the Jinan University and Independent director of the Company
Jiang Dinghang
Born in 1963 a master degree and a lawyer. He successively served as the minister of legal consultation department
of Shenzhen Social Security Bureau deputy director of Shenzhen Labor Bureau Office director of general office of
Shenzhen SDG GM of the Shenzhen SDG Songli Company GM of the Shenzhen Communications Industry Co.Ltd and apprentice lawyer of Guangdong Zhong An Laws Firm. Now he serves as senior partner of Shanghai
ALLBRIGHT (Shenzhen) Law Office and Independent director of the Company.
Zhang Dong
Born in 1974 a doctoral candidate postdoctoral economics senior Economist and senior gold investment analyst.
He successively served as Deputy GM of Shenzhen Qiang Zhuang Computer Tech. Co. Ltd Deputy GM of
Shenzhen Brain Age Economic and Cultural Co. Ltd the assistant president of Hong Kong Leader Culture Media
Co. Ltd GM of Shenzhen Zhong Shi Advertising Co. Ltd GM of Heilongjiang Luk Kwai Fook Jewelry Limited
and President of Luk Kwai Fook Jewelry Group. No he serves as executive director of Shenzhen Yongtian Shengdao
Investment Development Co. Ltd. president of Shenzhen Zhengyuan Foundation Jewelry Co. Ltd. and Independent
director of the Company.Guo Xiaodong
Born in 1964 a bachelor degree and senior economist. He successively served as assistant engineer of Shuangliao
Agricultural Machinery Bureau in Jilin Province engineer of Fourth Research Laboratory of Jilin Institute of
Agricultural Machinery manager of Gaodao industrial (Shenzhen) Co. Ltd. minister of the engineering dept.
deputy GM and GM of Shenzhen SDG Development Center Property Management Company deputy GM of
Shenzhen SDG Development Center Construction Supervision Company Director and GM of Shenzhen SDG
Development Center Property Management Company deputy GM of Shenzhen SDG Property Co. Ltd. Chairman
of the Supervisory Committee of Shenzhen SD Real Estate Co. Ltd and Chairman of the Supervisory Committee of
Shenzhen SD Xiaomeisha Tourism Development Co. Ltd. Now he serves as Chairman of Supervisory Committee of
the Company
Chen Yangsheng
Born in 1963 a postgraduate and senior accountant. He ever served as deputy director/director of the financial dept.
in Shenzhen Industrial Products Trade Group Company; deputy director/director/CFO of the financial dept. in
Shenzhen Aokangde Group Company; director and CFO of Shenzhen State-owned Duty-Free Commodity (Group)
Company; director and CFO of Shenzhen Agricultural Products Co. Ltd. and supervisor of Shenzhen Tagen Group
Co. Ltd.; now he serves as director and CFO of Shenzhen SDG Co. Ltd-controlling shareholder of the Company
and Supervisor of the Company.Yang Jianping
Born in 1972 a postgraduate and certified public accountant. He ever served as Business manager of accounting and
finance department of SDGI financial manager of Taike Branch financial manager of Guanglan Branch deputy
manager and manager of the accounting & finance dept; Director and CFO of Shenzhen Tellus Holding Co. Ltd.Now he serves as director of the accounting & finance dept of SDG-controlling shareholder of the Company and
Supervisor of the Company
Liu Haicheng
Born in 1969 a postgraduate and certified public accountant. She ever served as staff of design dept. of Dongfeng
Auto Wheel Co. Ltd. staff of technical dept. of Shenzhen Dongfeng Motor Co. Ltd. staff of the secretariat of
Shenzhen Automobile Association operations dept. staff of the automobile division of the Company staff of
enterprise management dept. and deputy manager of the Company. Now she serves as manager of the enterprise
management dept. and supervisor of the Company
Zhang Zheng
Born in 1984 a Bachelor degree. He successively served as senior auditor of Shenzhen Branch of Shenzhen
Zhongqin Wanxin Accountant Affairs the financing commissioner of planning & finance dept. of SDG deputy
manager of the planning & finance dept. of the Company. Now he serves as deputy manager of the audit supervision
department and supervisor of the Company
Tan Zhong
Born in 1968 has a bachelor’s degree and is qualified as a lawyer and a corporate legal consultant formerly served
as legal counsel and deputy manager of the Enterprise Management Department of Shenzhen Automobile Industry
and Trade Corporation deputy director of the board secretary legal affairs representative and manager of the
enterprise management department of the Company general manager and general Party branch secretary of
Shenzhen SD Huari Automobile Enterprise Co. Ltd. and currently serves as the full-time deputy secretary of the
Party Committee of the Company.Feng Yu
Born in 1967 bachelor’s degree. He ever took the deputy director of Haicheng Foreign Economic and Trade
Commission of Liaoning Province director of liaison department of Youth President Committee of State-owned
Assets Administration Deputy GM of Shenzhen Xianke Real-estate Co. Ltd. Manager of Investment Department of
China Sports Group Industry Co. Ltd.; Deputy director and Director to the Office of General Manger of Shenzhen
SDG Co. Ltd; and Supervisor of the Company. Now he acts as Deputy General Manager of the Company
Xie Jing
Born in 1965 a citizenship of Canadian bachelor’s degree and a senior engineer national registered supervision
engineer. He successively served as structural engineer of Hunan Light Industry Design Institute engineer of the
Hunan Branch of Bank of China assistant GM of the real estate dept. and GM of Engineering department of SDG
deputy GM of Shenzhen Jincheng Real Estate Group Co. Ltd. the executive president of Shenzhen Jiaanda Group
and GM etc. of the land reserve center of Weiye Holding. Currently he serves as Deputy GM of the Company.Qi Peng
Born in 1973 master's degree economist he has obtained the qualification certificate of secretary of the board from
Shenzhen Stock Exchange. He successively served as secretary to the president and director in information center of
Shenzhen Special Economic Zone Development (Group) Co. Ltd.; deputy director in secretariat of the board and
deputy manager in enterprise development department and manager in automobile business department and
management department of Shenzhen Tellus(Group) Co. Ltd.; general manager of Shenzhen Tellus Automobile
Service Chain Co. Ltd.; general manager of Shenzhen Tellus New Yongtong Automobile Development Co. Ltd.;
director secretariat of the board of Shenzhen Tellus(Group) Co. Ltd.; and now chairman of Shenzhen Jewelry
Industry Service Co. LTD. GM of Shenzhen Tellus Treasure Supply Chain Tech. Co. Ltd. and secretary of the
board of the Company
Post-holding in shareholder’s unit
√Applicable □Not applicable
Name Name of shareholder’s unit
Position in
shareholder’s
unit n
Start dated of office
term
End
date of
office
term
Received
remuneration
from
shareholder’s
unit (Y/N)
Fu Chunlong
Shenzhen Special
Development Group Co. Ltd.
Deputy GM December 1 2017 Y
Yu Lei
Shenzhen Special
Development Group Co. Ltd.
Deputy GM August 1 2011 Y
Chen Yangsheng
Shenzhen Special
Development Group Co. Ltd.
CFO December 1 2016 Y
Yang Jianping
Shenzhen Special
Development Group Co. Ltd.
Director of
planning &
finance dept.January 1 2018 Y
Post-holding in
shareholder’s unit
N/A
Post-holding in other unit
√Applicable □Not applicable
Name Name of other units Position in
Start dated of office
term
End
date of Received
other unit n office
term
remuneration
from other unit
(Y/N)
Zhang Quanxun
Shenzhen Capital Fortune Investment
Management Co. Ltd.
Deputy
President
February 1 2013 Y
Gu Zhiming
Shenzhen Yue Peng Jin Jewelry Co.Ltd
Deputy GM May 1 2011 Y
Hu Yuming Jinan University
professor of
school of
management
and doctoral
supervisor
June 1 2003 Y
Jiang Dinghang
Shanghai ALLBRIGHT (Shenzhen)
Law Office
Senior partner April 1 2005 Y
Zhang Dong
Shenzhen Yongtian Shengdao
Investment Development Co. Ltd.
Executive
Director
April 1 2014 Y
Post-holding in
other unit
N/A
Punishment of securities regulatory authority in recent three years to the Company’s current and outgoing directors supervisors and
senior management during the reporting period
□Applicable √Not applicable
IV. Remuneration for directors supervisors and senior executives
Decision-making procedures recognition basis and payment for directors supervisors and senior executives
Decision-making procedures recognition basis and payment for directors supervisors and senior executives
executes in strict accordance with the "Salary Management System for Headquarters of Shenzhen Tellus(Group)
Co. Ltd. " "Staff Performance Management System for Headquarters of Shenzhen Tellus (Group) Co. Ltd."
"Implementing Rules of Remuneration and Appraisal Committee of the Board of Shenzhen Tellus(Group) Co.Ltd." "Annual Performance Management Approaches for Leading Group Members of Shenzhen Tellus(Group)
Co. Ltd." and other relevant system regulations.
Remuneration for directors supervisors and senior executives in reporting period
In 10 thousand Yuan
Name Title Sex Age
Post-holding
status
Total
remuneration
obtained from
the Company
(before taxes)
Whether
remuneration
obtained from
related party of
the Company
Fu Chunlong Chairman M 48
Currently in
office
71.03 Y
Yu Lei Director F 53
Currently in
office
0 Y
Zhang
Quanxun
Director M 48
Currently in
office
0 N
Gu Zhiming Director M 50
Currently in
office
0 N
Lv Hang Director GM M 60
Currently in
office
108.39 N
Lou Hong Director CFO F 53
Currently in
office
88.45 N
Hu Yuming
Independent
director
M 56
Currently in
office
8 N
Jiang Dinghang
Independent
director
M 58
Currently in
office
8 N
Zhang Dong
Independent
director
M 47
Currently in
office
8 N
Guo Xiaodong
Chairman of the
Supervisory
Committee
M 57
Currently in
office
33.34 Y
Chen
Yangsheng
Supervisor M 58
Currently in
office
0 Y
Yang Jianping Supervisor F 49
Currently in
office
0 Y
Liu Haicheng
Employee
supervisor
F 52
Currently in
office
45.24 N
Zhang Zheng
Employee
supervisor
M 37
Currently in
office
35.26 N
Tan Zhong
Deputy Party
secretary
M 53
Currently in
office
77.56 N
Feng Yu Deputy GM M 54
Currently in
office
86.01 N
Xie Jing Deputy GM M 56
Currently in
office
87.58 N
Qi Peng
Secretary of the
Board
M 48
Currently in
office
59.01 N
Total -- -- -- -- 715.87 --
Delegated equity incentive for directors and senior executives in reporting period
□Applicable √Not applicable
V. Particulars of workforce
1. Number of Employees Professional composition Education background
Employee in-post of the parent Company (people) 107
Employee in-post of main Subsidiaries (people) 195
The total number of current employees (people) 302
The total number of current employees to receive pay (people) 302
Retired employee’ s expenses borne by the parent Company
and main Subsidiaries (people)
1
Professional composition
Category of professional composition Numbers of professional composition (people)
Production personnel 39
Sales personnel 82
Technician 39
Financial staff 27
Administration staff 115
Total 302
Education background
Type of education background Numbers (people)
Master 31
Bachelor degree 82
Junior college 65
Other 124
Total 302
2. Remuneration Policy
The company strictly complies with the "Implementation Rules of the Remuneration and Appraisal Committee of
the Board of Directors of Shenzhen Tellus Holding Co. Ltd." "Remuneration Performance Management
Measures for Team Members of Shenzhen Tellus Holding Co. Ltd." "Remuneration Management System of
Headquarters Staff of Shenzhen Tellus Holding Co. Ltd." "Performance Management Measures for Headquarters
Staff of Shenzhen Tellus Holding Co. Ltd." and other relevant rules and regulations strictly implements
performance evaluation and pays remuneration according to the evaluation results.3. Training programs
The annual training work focuses on the improvement of middle-level managers and management skills the
improvement of the professional skills of reserve talents and core backbones. In the actual training work we will
continuously enrich the training contents expand the training form optimize the training process clarify the
training purpose and improve the training effect. The specific measures are as follows: firstly enrich the entry
learning database for new employees and accelerate the integration of new employees into the company; secondly
strengthen the professional training of grassroots employees and improve the quality of employees; thirdly
strengthen departmental training quota management and improve the use efficiency of training funds; fourthly
optimize the rewards rules of network college and continuously improve the learning atmosphere; the fifth is to
refine the management ability requirements and carry out targeted training for middle-level managers to improve
management capabilities; the sixth is to focus on external training and conduct strategic management skills
training to enhance the horizons of senior personnel.
4. Labor outsourcing
√Applicable □Not applicable
Total hours of labor outsourcing (hours) 2000
Total remuneration paid for labor outsourcing (RMB) 109310.59
Note: for a large number of outsourced labor services total number of hours worked and total remuneration paid for the outsourced
labour services should be disclosed.Section X. Corporate Governance
I. Corporate governance of the Company
During the reporting period the Company has been observing the laws and regulations as Company Law
Securities Law Governance Criteria of the Listed Companies Guidelines for Standardized Operation of Listed
Companies of Shenzhen Stock Exchange and relevant rules issued by the CSRC for the purpose of improving its
legal person governance structure setting up and improving the internal control system and standardizing its
operation level. According to the Articles of Association Procedure Rules of Shareholders General Meeting
Procedure Rules of Board of Directors Procedure Rules of Supervisory Committee Working Rules of
Independent Directors Working Rules of General Manager working rules of every committee of the Board and a
series of rules and regulations the Company maintained formal procedures clearly duties and obligations of its
general meeting board of directors supervisory committee each specialized committee of the board and senior
manager. Each of its directors supervisors and senior managers can perform their duties earnestly.
In 2020 the Company have convened 5 shareholders general meetings 12 meetings of the Board 5 meeting of
the Supervisory Committee 2 meetings of the audit committee of the Board 3 meetings of Strategy Committee of
the Board and 2 meetings of Remuneration and Appraisal Committee of the Board; relevant governance
documents as Internal Audit Management Measures and Investment Management Regulations etc. are being
revised; In order to establish and improve the company’s standardized operation mechanism and improve the
company’s internal control system the company promoted the revision promulgation and abolition of the system
in accordance with the established system construction work plan and revised a number of rules and regulations
throughout the year.
As of the end of the reporting period the actual situation of corporate governance was in line with the
requirements of the regulatory documents issued by the China Securities Regulatory Commission on the
governance of listed companies.Is there any difference between the actual condition of corporate governance and relevant regulations about
corporate governance for listed Company from CSRC?
□Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations about
corporate governance for listed Company from CSRC.II. Independent of the Company relative to controlling shareholders’ in aspect of businesses
personnel assets organization and finance
The Company has been independent from the controlling shareholders in terms of business personnel asset
institution and finance. The Company has independent and complete business and is able to operate
independently.(i) Business: the Company belongs to independent legal person entity. Being completely independent from
controlling shareholders it has independent and complete business system and is able to operate independently.The Company has independent production sales and service systems and its major business. There is no
inter-competition between the Company and its controlling shareholders and related parties.(ii) Personnel: the Company establishes complete labor human resources and salary management systems. Senior
executive as GM Deputy GM CFO and Secretary of the Board etc. are receives remuneration from the Company
since they are employed by the Company and no one takes position in the enterprises owned by shareholders.(iii) Assets: The Company independently and completely owns the business system and underlying assets related
to the operation and independently registers establishes accounts adjusts accounts and manages the assets and
the assets are independent of the controlling shareholders and other enterprises controlled by them.(iv) Finance: the Company has independent financial accounting department which set independent accounting
calculation system and finance management system. No controlling shareholder intervenes in the capital
application of the Company. The Company opens separate bank accounts. No capital is saved in the financial
Company or settlement center account controlled by substantial shareholder or other related parties; the Company
does not share bank account with controlling shareholders and other enterprise under their control. And The
Company pays taxes by law independently.
(v) Institution: the board the supervisory committee and other internal institutions of the Company operate
independently. All the institutions of the Company are set according to the standards requirements applicable to
listed Company and actual business natures of the Company. It has independent office location.III. Horizontal competition
□Applicable √Not applicable
IV. In the report period the Company held annual shareholders’ general meeting and
extraordinary shareholders’ general meeting
1. Annual Shareholders’ General Meeting in the report period
Session of meeting Type
Ratio of
investor
participati
on
Meeting Date
Date of
disclosure
Index of disclosure
First Extraordinary
General Meeting of
2020
Extraordi
nary
General
Meeting
66.07%
March 23
2020
March 24
2020
”Resolution Notice of First ExtraordinaryGeneral Meeting of 2020” (No.:
2020-013) published on Securities Times
Hong Kong Commercial Daily and Juchao
Website (www.cninfo.com.cn
Annual General Annual 66.10% April 24 April 25 2020 “Resolution Notice of Annual GeneralMeeting of 2019 General
Meeting
2020 Meeting of 2019” (No.: 2020-025)
published on Securities Times Hong
Kong Commercial Daily and Juchao
Website (www.cninfo.com.cn)
Second
Extraordinary
General Meeting of
2020
Extraordi
nary
General
Meeting
65.78% June 17 2020 June 18 2020
”Resolution Notice of Second
Extraordinary General Meeting of 2020”
(No.: 2020-032) published on Securities
Times Hong Kong Commercial Daily and
Juchao Website (www.cninfo.com.cn
Third Extraordinary
General Meeting of
2020
Extraordi
nary
General
Meeting
65.19%
August 3
2020
August 4 2020
”Resolution Notice of Third
Extraordinary General Meeting of 2019”
(No.: 2020-041) published on Securities
Times Hong Kong Commercial Daily and
Juchao Website (www.cninfo.com.cn
Fourth Extraordinary
General Meeting of
2020
Extraordi
nary
General
Meeting
64.51%
November
16 2020
November 17
2020
”Resolution Notice of Fourth
Extraordinary General Meeting of 2020”
(No.: 2020-050) published on Securities
Times Hong Kong Commercial Daily and
Juchao Website (www.cninfo.com.cn
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□Applicable √Not applicable
V. Responsibility performance of independent directors
1. The attending of independent directors to Board meetings and general meeting
The attending of independent directors to Board Meeting and shareholders general meeting
Name of
independent
director
Times of
Board
meeting
supposed to
attend in the
report period
Times of
Presence
Times of
attending by
communicati
on
Times of
entrusted
presence
Times of
Absence
Absent the
Meeting for
the second
time in a row
(Y/N)
Times of
attending
shareholders
’ meeting
Hu Yuming 12 2 10 0 0 N 1
Jiang Dinghang 12 2 10 0 0 N 4
Zhang Dong 12 2 10 0 0 N 3
2. Objection for relevant events from independent directors
Independent directors come up with objection about Company’s relevant matters
□Yes √No
Independent directors has no objections for relevant events in reporting period
3. Other explanation about responsibility performance of independent directors
The opinions from independent directors have been adopted
√ Yes □ No
In accordance with the provisions of the Company Law the Securities Law the Stock Listing Rules the
Independent Director System and other relevant laws and regulations the company’s independent directors paid
attention to the normalization of the company’s operations performed their duties independently diligently and
conscientiously did their duties the independent directors issued independent objective and fair opinions
oninvestment in bonded business group projects profit distribution matters self-evaluation of the company’s
internal control daily related transactions in 2020 revise the monetary fund management system regarding the
company's application for credit line the use of idle self-owned funds to purchase bank wealth management
products changes in accounting estimates and accounting policies changing audit institutions for 2020 purchase
of listed company directors and supervisors high liability insurance and other matters requiring independent
opinions from independent directors during the reporting period which played an active role in improving the
company’s supervision mechanism and helping the board of directors make scientific and objective decisions and
played an important role in safeguarding the legitimate rights and interests of the company and all shareholders.VI. Duty performance of the special committees under the board during the reporting period
Board of Director of the Company have three special committees as strategic committee auditing committee and
remuneration and appraisal committee and formulated implementation rules for the special committees
independently. During the reporting period all committees had clear responsibilities and the overall operations
were good which ensured efficient operation and scientific decision-making of the board of directors.
1. Duty performance of the strategic committee
The strategic committee of the board is specially set-up according to the regulation of Governance Criteria of the
Listed Companies responsible for study on the long term development strategy and material investment decisions
and raising its recommendations. The committee comprised of 5 directors and the committee is chaired by
chairman of the Company. During the reporting period the committee actively performed its duties and carry out
works strictly in accordance with relevant rules of the CSRC Shenzhen Stock Exchange and Working Rules of
Strategic Committee.Three meetings were held by strategic committee in 2020 which including:
The first meeting of the board’s strategic committee in 2020 was held on June 1 2020 it reviewed the Proposal
on Participating in the equity transfer auction of Shenzhen Dongfeng Motor Co. Ltd and Major Assets
Restructuring; the second meeting of the board’s strategic committee in 2020 was held on June 19 2020 it
reviewed the Proposal to Invest in the Bonded Business Group Project; the third meeting of the board’s strategic
committee in 2020 was held on July 17 2020 it reviewed the Proposal on Waiver of Pre-emptive Rights to the
50% Equity of Shenzhen Dongfeng Motor Co. Ltd from Shenzhen Auto Industry and Trade Corporation; Each
committee member made research on the investment project and offered proposals which played an important
role in strengthening the scientificity of investment decision and improving the benefits and quality of investment
decision..
2. Duty performance of the audit committee
The audit committee of the board of directors is a specialized work organization set up by the board of directors in
accordance with the Guidelines for the Governance of Listed Companies and is mainly responsible for the
communication supervision and verification of internal and external audits of the company. The committee
comprised of 5 directors including 3 independent directors and the committee is chaired by independent director
of the Company. During the reporting period the committee actively performed its duties and carry out works
strictly in accordance with relevant rules of the CSRC Shenzhen Stock Exchange and Working Rules of Audit
Committee. Pay close attention to the company’s management financing and implementation of internal control
standards; strengthen the communication and contact with the company’s relevant responsible departments
review the validity assessment of the company’s internal control and enterprise risk management through
communication inspection reporting etc. and check whether the company’s operations financing and
accounting policies comply with laws and regulations and provide management and audit opinions.Two meetings were held by audit committee in 2020 which including:
(1) During the annual audit the audit committee took active attitude in relevant works. Prior to the official
involvement of accounting firm in the annual audit after negotiation with accounting firm reviewed the financial
statements prepared by the Company the committee agreed to submit the financial statements and related
information to audit.
(2) The audit committee held the first meeting of 2020 on 2 April 2020 to re-review the financial statements and
formed written opinions and resolutions in respect of the annual financial statements audit work summary report.
(3) The audit committee held the second meeting of 2020 on 28 October 2020 to review the proposal of changing
the annual auditing institution and agreed to submit for deliberation on the Board.
3. Duty performance of the remuneration and appraisal committee
The remuneration and appraisal committee of the board of directors is a specialized working organization set up
by the board of directors in accordance with the Guidelines for the Governance of Listed Companies it is mainly
responsible for formulating the assessment criteria for the company’s directors and senior management personnel
and making the assessment responsible for formulating and reviewing the pay policy and programs of the
company’s directors and senior management personnel and responsible for the board of directors. The committee
comprised of 5 directors including 3 independent directors and the committee is chaired by independent director
of the Company. During the reporting period the committee actively performed its duties and carry out works
strictly in accordance with relevant rules of the CSRC Shenzhen Stock Exchange and Working Rules of Audit
Committee. The committee comprised of 5 directors including 3 independent directors and the committee is
chaired by independent director of the Company. During the reporting period the committee actively performed
its duties and carry out works strictly in accordance with relevant rules of the CSRC Shenzhen Stock Exchange
and Working Rules of Audit Committee.Two meetings were held by remuneration and appraisal committee in 2020 which including:
The remuneration of the Board held the First meeting of 2020 on 2 April 2020 to review the proposal on 2020
Team Member Performance Indicators. On 4 August 2020 the remuneration and appraisal committee of the board
of directors held the second meeting of 2020 reviewed and approved the assessment results of some probationary
senior management positions and revised the management of annual performance appraisals for directors
supervisors and senior management of the Company after review all members of the remuneration and appraisal
committee considered that the remuneration payment during the reporting period was in line with the company’s
performance appraisal system the remuneration of directors supervisors and senior executives were determined
by the company’s relevant system.VII. Works from Supervisory Committee
The Company has risks in reporting period that found in supervisory activity from supervisory committee
□ Yes √ No
Supervisory committee has no objection about supervision events in reporting period
VIII. Examination and incentives of senior management
In the reporting period the annual performance of senior executives of the Company have been evaluated by the
Board according to the Management Methods on Team Member’s Remuneration and Performance remuneration
shall be pay in line with the results.IX. Internal Control (IC)
1. Details of major defects in IC appraisal report that found in reporting period
□Yes √ No
2. Appraisal Report of Internal Control
Disclosure date of full internal control
evaluation report
April 16 2021
Disclosure index of full internal
control evaluation report
Juchao website for information disclosure appointed by Shenzhen Stock Exchange:
http://www.cninfo.com.cn
The ratio of the total assets of units
included in the scope of evaluation
accounting for the total assets on the
Company's consolidated financial
statements
100.00%
The ratio of the operating income of
units included in the scope of
evaluation accounting for the
operating income on the Company's
consolidated financial statements
100.00%
Defects Evaluation Standards
Category Financial Reports Non-financial Reports
Qualitative criteria
The qualitative standards for the evaluation
of internal control deficiencies in financial
reports determined by the company are as
follows:
Significant defects: Individual defects or
together with other defects causing the
material misstatements in financial reports
cannot be timely prevented or found or
corrected. It is recognized as a significant
defect if following cases happen:
① Fraud of management leading to material
misstatements of financial results or false
financial reports which mislead users of
financial statements and result in
decision-making mistakes and litigation; ②
Ineffective control environment;③ Major
internal control deficiencies found and
reported to the management but haven’t been
corrected after a reasonable time; ④ The
decision-making of the Company’s major
matters has not fulfilled the corresponding
decision-making process resulting in
significant losses of the Company; ⑤
Important businesses involving the
Company’s production and management are
lack of effective control; ⑥ Other defects
that seriously mislead the correct judgments
made by the users of the statements resulting
in the company’s major compensation.Important defects: Individual defects or
together with other defects causing the
misstatements in financial reports cannot be
timely prevented or found or corrected
though the misstatements don’t reach and
exceed the importance level they should still
cause the management’s attention. It is
The qualitative standards for
evaluating the internal control
deficiencies of non-financial reports
determined by the company are as
follows:
The following circumstances shall be
deemed as a major defect:
①Great decisions violate the
Company’s established procedure
resulting in significant losses to the
Company; ②Serious violation of
laws and regulations results in
significant losses to the Company;
③Important businesses are lack of
system control or system control
fails; ④ Serious brain drain of core
management or core technical staff;
⑤Significant deficiencies in the
internal evaluation results have not
been corrected. ⑥ The failure of
internal control to information
disclosure causes the company to be
publicly condemned by the regulatory
authorities.
Defects with the following
characteristics are regarded as
important defects: ① The Company
violates the enterprise internal
regulations and causes significant
losses; ②Serious brain drain of
business personnel in the Company’s
key positions; ③ The Company’s
significant business systems have
deficiencies; ④ The significant
deficiencies in the internal control of
the Company have not been
recognized as an important defect if
following cases happen: ① The selection and
application of accounting policies do not
follow the generally accepted accounting
principles; ② Anti-fraud programs and
control measures have been not established;
③Corresponding control mechanism for
accounts handling of unconventional or
special transactions has not been established
or implemented and has no there is no
appropriate compensatory controls; ④ The
controls to the period-end financial reporting
process have one or more defects and cannot
reasonably ensure that the financial
statements prepared are true and accurate.General deficiencies refer to the deficiencies
except for major and significant deficiencies.corrected.General deficiencies refer to
deficiencies except for major and
significant deficiencies.The quantitative determination
standard for internal control
deficiencies this year is based on the
consolidated statement data for the
same period of the previous year.Quantitative standard
1. Major deficiencies: misstatement
amount > 10% of total profit and absolute
amount > 2 million Yuan;
2. Significant deficiencies: 5% of total
profit < misstatement amount ≤10% of total
profit and absolute amount > 1 million
Yuan; or 1 million Yuan < absolute amount
≤ 2 million Yuan and misstatement
amount > 5% of total profit.
3. General deficiencies: misstatement
amount ≤ 5% of total profit or absolute
amount ≤ 1 million Yuan
1. Major deficiencies: loss amount >
1.5% of owner's equity attributable to
parent Company and absolute
amount > 5 million Yuan;
2. Significant deficiencies: 0.5% of
owner's equity attributable to parent
Company < loss amount ≤ 1.5% of
owner's equity attributable to parent
Company or 1 million Yuan <
absolute amount ≤ 5 million Yuan;
3. General deficiencies: loss amount
≤ 0.5% of owner's equity attributable
to parent Company or absolute
amount ≤ 1 million Yuan
Amount of significant defects in
financial reports
0
Amount of significant defects in
non-financial reports
0
Amount of important defects in
financial reports
0
Amount of important defects in
non-financial reports
0
X. Auditing report of internal control
√Applicable □Not applicable
Deliberations in Internal Control Audit Report
We consider that: in all major aspects Shenzhen Tellus Holding Co. Ltd. has efficiency in financial report of internal control
dated 31 December 2020 according to Basic Standards of Internal Control for Enterprise and relevant regulations.
Disclosure details of audit report
of internal control
Disclosure
Disclosure date of audit report of
internal control (full-text)
April 16 2021
Index of audit report of internal
control (full-text)
Juchao website for information disclosure appointed by Shenzhen Stock Exchange:
http://www.cninfo.com.cn
Opinion type of auditing report of
IC
Standard unqualified opinion
whether the non-financial report
had major defects
No
Carried out modified opinion for internal control audit report from CPA
□Yes √ No
The internal control audit report issued by CPA has concerted opinion with self-evaluation report issued from the Board
√ Yes □ No
Section XI. Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when
annual report approved for released or fail to cash in full on due
No
Section XII. Financial Report
I. Audit report
Type of audit opinion Standard unqualified opinion
Signing date of audit report April 15 2021
Name of audit institute
RSM Certified Public Accountants (Special General
Partnership)
Number of Audit report RSM Shen Zi[2021] No.518Z0303
Name of CPA Li Qiaoyi Qin Changming
Auditor’s Report
To the Shareholders of Shenzhen Tellus Holding Co. Ltd.:
I. Auditing opinions
We have audited the financial statement under the name of Shenzhen Tellus Holding Co. Ltd. (hereinafter
referred to as Tellus Company) including the consolidated and parent Company’s balance sheet of 31 December
2020 and profit statement and cash flow statement and statement on changes of shareholders’ equity for the year
ended and notes to the financial statements for the year ended.In our opinion the attached financial statements are in all material respects in accordance with the provision of
Accounting Standards for Business Enterprises and they fairly present the financial status of the Company and of
its parent company as of 31 December 2020 and its operation results and cash flows for the year ended.II. Basis of opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Ourresponsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of the
Financial Statements” section of the auditor’s report. We are independent of the Company in accordance with the
Certified Public Accountants of China’s Code of Ethics for Professional Accountants and we have fulfilled our
other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.III. Key audit matters
Key audit matters are those matters that in our professional judgment were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on
these matters.(i) Revenue recognition
1. Matter description
Found more in the 34 in Note V and Note XIV carried in financial statement
Operating revenue of Tellus is mainly derived from automobile sales automotive repair & testing jewellery sales
& service real estate leasing and services. In 2020 Tellus achieved an operating revenue of 424419203.34 Yuan
with 25.68% down from a year earlier.Since the operating revenue is one of the key performance indicators of Tellus there may be an inherent risk that
the management of Tellus (hereinafter referred to as management) may use inappropriate revenue recognition to
achieve specific goals or expectations. Accordingly we have identified revenue recognition as a key audit matter.
2. Audit response
The relevant procedures we have implemented for revenue recognition including:
(1) Understand the key internal controls relating to revenue recognition evaluation the design of these controls
determine whether they are being implemented and test the operating effectiveness of the relevant internal
controls.
(2) Check major merchandising contracts real estate leasing contracts and evaluate whether the revenue
recognition policy is in compliance with the provision of Accounting Standards for Business Enterprise;
(3) Implementing analytical procedures for operating revenue and gross margin on a monthly basis or on products
identify whether there are significant or unusual fluctuations and find out the causes of such fluctuations;
(4) Check supporting documents related to revenue recognition by sampling including merchandise sales contract
or real estate contract invoice merchandise sales order delivery receipts and customer sign receipt etc.;
(5) combined with the account receivable letter confirm the current sales volume to the main customers by
sampling;
(6) as for the revenue recognized before and after the balance sheet date check the supporting documents such as
invoices sales orders delivery receipts and customer sign receipt in a sampling manner and evaluate whether the
operating revenue is recognized in an appropriate period;
(7)check whether the revenue is properly resented in the financial statements in accordance with the Accounting
Standards for Business Enterprises.(ii) Carrying value of the investment real estate fixed assets and construction in progress
1. Matter description
Found more in the 17 18 19 and 20 in Note III and 11 12 and 13 in Note V carried in financial statement
As of 31 December 2020 the carrying value of investment real estate fixed assets and construction in progress
are amounted to 789124019.52 Yuan accounts for 46.19% of the total assets.We identified the carrying value of investment real estate fixed assets and construction in progress as key audit
matters due to their materiality to the financial statement and the determination of whether the related expenditure
qualifies for capitalization the point at which construction in progress is completed to carry forward fixed assets
and commencement of depreciation all of which involve significant management judgement.
2. Audit response
The relevant procedures we have implemented for investment real estate fixed assets and construction in progress
including:
(1) understand the key internal control relevant to the existence completeness and accuracy determination of the
investment real estate fixed assets and construction in progress evaluation the design of these controls determine
whether they are being implemented and test the operating effectiveness of the relevant internal controls.
(2) implementing monitoring procedures to understand the state of use and construction progress of investment
real estate fixed assets and construction in progress.
(3) for the amount of construction in progress incurred during the year check the prect contracting contract
settlement profiles application for progress payments invoices and payment vouchers etc check whether the
amount booked in the account is accurate and check whether the indirect expenses booked into the construction in
the current year meet the capitalization conditions;
(4) extract the amount of construction in progress before and after the balance sheet date for cut-off test check
whether cost of the construction in progress is included in the correct accounting period according to actual work
progress;
(5) for works completed during the year to be carried forward to investment real estate check the completion and
acceptance data evaluate whether the timing of completion and depreciation is accurate;
(6) check whether the accrual of investment real estate and depreciation of fixed assets are accurate;
(7) check that information relating to investment real estate fixed assets and construction in progress are properly
presented in the financial statement.IV. Other information
The management of Tellus is responsible for other information which includes the information covered in the
Company’s 2020 annual report excluding the financial statement and our audit report.
Our audit opinions on the financial statements do not cover other information and we do not issue any form of
authentication conclusions on other information.In combination with our audit of the financial statements it is our responsibility to read other information and in
doing so to consider whether there is material inconsistency or material misstatement between the other
information and the financial statements or what we learned in the course of our audit.
Based on the work we have performed if we determine that other information is materially misstated we should
report that fact. We have no matters to report in this regard.V. Responsibilities of management and those charged with governance for the financial statements
The management is responsible for the preparation of the financial statements in accordance with the Accounting
Standards for Enterprise to secure a fair presentation and for the design establishment and maintenance of the
internal control necessary to enable the preparation of financial statements that are free from material
misstatement whether due to fraud or error.In preparing the financial statements the management is responsible for assessing the Company’s ability to
continue as a going concern disclosing matters related to going concern (if applicable) and using the going
concern assumption unless the management either intends to liquidate the Company or to cease operations or has
no realistic alternative but to do so.Those charged with Tellus Company(hereinafter referred to as the governance) are responsible for overseeing the
Company’s financial reporting process.
VI. Responsibilities of the auditor for the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement whether due to fraud or error and to issue an audit report that includes our audit opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with the CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if individually or in the aggregate they could reasonably be expected to
influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with the CAS we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error
design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and
appropriate to provide a basis for audit opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions
misrepresentations or the override of internal control.(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern assumption and based on the
audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists we are required by the CAS to draw users’ attention in audit report to the related disclosures in
the financial statements or if such disclosures are inadequate to modify audit opinion. Our conclusions are based
on the information obtained up to the date of audit report. However future events or conditions may cause the
Company to cease to continue as a going concern.
(5) Evaluate the overall presentation structure and content of the financial statements and whether the financial
statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express audit opinion on the financial statements. We are responsible for the
direction supervision and performance of the group audit. We remain solely responsible for audit opinion.We communicate with those charged with governance regarding among other matters the planned scope and
timing of the audit and significant audit findings including any significant deficiencies in internal control that we
identify during our audit.We also provide the governance with a statement of our compliance with the ethical requirements relating to our
independence and communicate with the governance on all relationships and other matters that may reasonably be
considered to affect our independence as well we the relevant precautions (if applicable).
From the matters communicated with those charged with governance we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in the auditor’s report unless law or regulation precludes public disclosure
about the matter or when in extremely rare circumstances we determine that a matter should not be
communicated in the auditor’s report because of the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.II. Financial Statement
Prepared by Shenzhen Tellus Holding Co. Ltd.Statement in Financial Notes are carried in RMB/CNY
1. Consolidated Balance Sheet
In RMB
Item December 31 2020 December 31 2019
Current assets:
Monetary funds 237625698.93 428851606.04
Settlement provisions
Capital lent
Tradable financial assets 314013869.86 60486575.34
Derivative financial assets
Note receivable
Account receivable 19828510.36 112613224.27
Receivable financing
Accounts paid in advance 9847749.74 12683603.89
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance
receivable
Other account receivable 29269790.83 44908546.40
Including: Interest receivable
Dividend receivable 24647732.42 39647732.42
Buying back the sale of financial
assets
Inventories 22079679.93 21389602.83
Contractual assets
Assets held for sale
Non-current asset due within one
year
Other current assets 6000566.69 3403969.23
Total current assets 638665866.34 684337128.00
Non-current assets:
Loans and payments on behalf
Debt investment
Other debt investment
Long-term account receivable
Long-term equity investment 123640955.57 162178544.05
Investment in other equity
instrument
10176617.20 10176617.20
Other non-current financial
assets
Investment real estate 568246616.13 554599503.55
Fixed assets 119136917.91 107119796.59
Construction in progress 101740485.48 47654393.55
Productive biological asset
Oil and gas asset
Right-of-use assets
Intangible assets 51627673.21 50561225.67
Expense on Research and
Development
Goodwill
Long-term expenses to be
apportioned
30714879.22 13606805.49
Deferred income tax asset 8498822.10 8658962.39
Other non-current asset 55993467.99 6889167.54
Total non-current asset 1069776434.81 961445016.03
Total assets 1708442301.15 1645782144.03
Current liabilities:
Short-term loans
Loan from central bank
Capital borrowed
Trading financial liability
Derivative financial liability
Note payable
Account payable 76583166.53 69087430.42
Accounts received in advance 2403580.47 27299822.71
Contractual liability 18988628.13
Selling financial asset of
repurchase
Absorbing deposit and interbank
deposit
Security trading of agency
Security sales of agency
Wage payable 28365685.21 31204794.89
Taxes payable 21062154.32 71425267.61
Other account payable 158663974.62 101266802.49
Including: Interest payable
Dividend payable 46295.65
Commission charge and
commission payable
Reinsurance payable
Liability held for sale
Non-current liabilities due
within one year
Other current liabilities 2237573.19
Total current liabilities 308304762.47 300284118.12
Non-current liabilities:
Insurance contract reserve
Long-term loans 11171759.33
Bonds payable
Including: Preferred stock
Perpetual capital
securities
Lease liability
Long-term account payable 3920160.36 3920160.36
Long-term wages payable
Accrual liability 268414.80 2225468.76
Deferred income 131102.38 139400.00
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 15491436.87 6285029.12
Total liabilities 323796199.34 306569147.24
Owner’s equity:
Share capital 431058320.00 431058320.00
Other equity instrument
Including: Preferred stock
Perpetual capital
securities
Capital public reserve 431449554.51 431449554.51
Less: Inventory shares
Other comprehensive income 26422.00 26422.00
Reasonable reserve
Surplus public reserve 23848485.62 21007488.73
Provision of general risk
Retained profit 424141893.34 387423510.78
Total owner’ s equity attributable to
parent company
1310524675.47 1270965296.02
Minority interests 74121426.34 68247700.77
Total owner’ s equity 1384646101.81 1339212996.79
Total liabilities and owner’ s equity 1708442301.15 1645782144.03
Legal Representative: Fu Chunlong
Person in charge of Accounting Works: Lou Hong
Person in charge of Accounting Institution: Liao Zebin
2. Balance Sheet of Parent Company
In RMB
Item December 31 2020 December 31 2019
Current assets:
Monetary funds 71772303.28 201885691.27
Trading financial assets 118484941.09 40324383.56
Derivative financial assets
Note receivable
Account receivable 249428.20 206710.76
Receivable financing
Accounts paid in advance 100000.00
Other account receivable 126970097.13 116037773.09
Including: Interest receivable
Dividend
receivable
547184.35 547184.35
Inventories
Contractual assets
Assets held for sale
Non-current assets maturing
within one year
Other current assets 1419760.18
Total current assets 317476769.70 359974318.86
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments 876760784.88 859355040.60
Investment in other equity
instrument
10176617.20 10176617.20
Other non-current financial
assets
Investment real estate 31971205.42 39616602.02
Fixed assets 19082604.22 14012830.64
Construction in progress 100252309.72 35321704.26
Productive biological assets
Oil and natural gas assets
Right-of-use assets
Intangible assets 50135951.98 48953266.56
Research and development costs
Goodwill
Long-term deferred expenses 8786280.69 2639122.63
Deferred income tax assets 3397708.75 3557849.04
Other non-current assets 27427939.18 6789167.54
Total non-current assets 1127991402.04 1020422200.49
Total assets 1445468171.74 1380396519.35
Current liabilities
Short-term borrowings
Trading financial liability
Derivative financial liability
Notes payable
Account payable 267841.07 14000.00
Accounts received in advance 682934.41
Contractual liability
Wage payable 15784381.93 8199278.01
Taxes payable 1123476.72 54684929.01
Other accounts payable 345894297.23 257260350.77
Including: Interest payable
Dividend payable
Liability held for sale
Non-current liabilities due
within one year
Other current liabilities
Total current liabilities 363752931.36 320158557.79
Non-current liabilities:
Long-term loans 11171759.33
Bonds payable
Including: preferred stock
Perpetual capital
securities
Lease liability
Long-term account payable
Long term employee
compensation payable
Accrued liabilities
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 11171759.33
Total liabilities 374924690.69 320158557.79
Owners’ equity:
Share capital 431058320.00 431058320.00
Other equity instrument
Including: preferred stock
Perpetual capital
securities
Capital public reserve 428256131.23 428256131.23
Less: Inventory shares
Other comprehensive income
Special reserve
Surplus reserve 23848485.62 21007488.73
Retained profit 187380544.20 179916021.60
Total owner’s equity 1070543481.05 1060237961.56
Total liabilities and owner’s equity 1445468171.74 1380396519.35
Legal Representative: Fu Chunlong
Person in charge of Accounting Works: Lou Hong
Person in charge of Accounting Institution: Liao Zebin
3. Consolidated Profit Statement
In RMB
Item 2020 2019
I. Total operating income 424419203.34 571072893.90
Including: Operating income 424419203.34 571072893.90
Interest income
Insurance gained
Commission charge and
commission income
II. Total operating cost 377759171.82 509897504.26
Including: Operating cost 319261201.59 431021312.64
Interest expense
Commission charge and
commission expense
Cash surrender value
Net amount of expense of
compensation
Net amount of withdrawal of
insurance contract reserve
Bonus expense of guarantee slip
Reinsurance expense
Tax and extras 4104477.41 6269059.85
Sales expense 17715132.43 23956102.30
Administrative expense 39984244.07 43668263.92
R&D expense
Financial expense -3305883.68 4982765.55
Including: Interest
expenses
1042694.54 7000636.08
Interest
income
4473218.76 2317143.23
Add: other income 1566918.68 292897.32
Investment income (Loss is
listed with “-”)
23458405.59 240569654.98
Including: Investment
income on affiliated company and joint
venture
14962411.52 19134325.91
The termination of
income recognition for financial assets
measured by amortized cost(Loss is
listed with “-”)
Exchange income (Loss is
listed with “-”)
Net exposure hedging
income (Loss is listed with “-”)
Income from change of fair
value (Loss is listed with “-”)
316475.19 477394.67
Loss of credit impairment
(Loss is listed with “-”)
1528748.01 1270480.08
Losses of devaluation of
asset (Loss is listed with “-”)
-23818.95 -662290.01
Income from assets disposal
(Loss is listed with “-”)
216207.53
III. Operating profit (Loss is listed with
“-”)
73506760.04 303339734.21
Add: Non-operating income 3289158.12 304620.63
Less: Non-operating expense 92751.70 1049085.73
IV. Total profit (Loss is listed with “-”) 76703166.46 302595269.11
Less: Income tax expense 16397936.55 83788034.93
V. Net profit (Net loss is listed with
“-”)
60305229.91 218807234.18
(i) Classify by business continuity
1.continuous operating net profit(net loss listed with ‘-”)
60305229.91 218807234.18
2.termination of net profit (netloss listed with ‘-”)
(ii) Classify by ownership
1.Net profit attributable to
owner’s of parent company
57663828.89 219669708.47
2.Minority shareholders’ gains
and losses
2641401.02 -862474.29
VI. Net after-tax of other
comprehensive income
Net after-tax of other comprehensive
income attributable to owners of parent
company
(I) Other comprehensive income
items which will not be reclassified
subsequently to profit of loss
1.Changes of the defined
benefit plans that re-measured
2.Other comprehensive
income under equity method that
cannot be transfer to gain/loss
3.Change of fair value of
investment in other equity instrument
4.Fair value change of
enterprise's credit risk
5. Other
(ii) Other comprehensive income
items which will be reclassified
subsequently to profit or loss
1.Other comprehensive
income under equity method that can
transfer to gain/loss
2.Change of fair value of
other debt investment
3.Amount of financial
assets re-classify to other
comprehensive income
4.Credit impairment
provision for other debt investment
5.Cash flow hedging
reserve
6.Translation differences
arising on translation of foreign
currency financial statements
7.Other
Net after-tax of other comprehensive
income attributable to minority
shareholders
VII. Total comprehensive income 60305229.91 218807234.18
Total comprehensive income
attributable to owners of parent
Company
57663828.89 219669708.47
Total comprehensive income
attributable to minority shareholders
2641401.02 -862474.29
VIII. Earnings per share:
(i) Basic earnings per share 0.1338 0.5096
(ii) Diluted earnings per share 0.1338 0.5096
Legal Representative: Fu Chunlong
Person in charge of Accounting Works: Lou Hong
Person in charge of Accounting Institution: Liao Zebin
4. Profit Statement of Parent Company
In RMB
Item 2020 2019
I. Operating income 37241063.15 38042399.39
Less: Operating cost 10754749.28 3772642.43
Taxes and surcharge 1176003.82 1721718.43
Sales expenses
Administration expenses 27966422.98 23285817.13
R&D expenses
Financial expenses -1876961.86 4032853.71
Including: interest
expenses
5767035.04
Interest income 1769825.26 1804555.52
Add: other income 21849.42
Investment income (Loss is
listed with “-”)
33827292.08 236551009.68
Including: Investment
income on affiliated Company and
joint venture
22156744.28 19318549.22
The termination of
income recognition for financial
assets measured by amortized cost
(Loss is listed with “-”)
Net exposure hedging
income (Loss is listed with “-”)
Changing income of fair
value (Loss is listed with “-”)
160557.53 324383.56
Loss of credit impairment
(Loss is listed with “-”)
639993.94 1057870.24
Losses of devaluation of
asset (Loss is listed with “-”)
-4998000.00
Income on disposal of
assets (Loss is listed with “-”)
II. Operating profit (Loss is listed
with “-”)
28872541.90 243162631.17
Add: Non-operating income 2000.00 33995.79
Less: Non-operating expense 18810.00
III. Total Profit (Loss is listed with
“-”)
28855731.90 243196626.96
Less: Income tax 445762.97 64583369.44
IV. Net profit (Net loss is listed with
“-”)
28409968.93 178613257.52
(i)continuous operating netprofit (net loss listed with ‘-”)
28409968.93 178613257.52
(ii) termination of net profit (netloss listed with ‘-”)
V. Net after-tax of other
comprehensive income
(I) Other comprehensive income
items which will not be reclassified
subsequently to profit of loss
1.Changes of the defined
benefit plans that re-measured
2.Other comprehensive
income under equity method that
cannot be transfer to gain/loss
3.Change of fair value of
investment in other equity instrument
4.Fair value change of
enterprise's credit risk
5. Other
(II) Other comprehensive
income items which will be
reclassified subsequently to profit or
loss
1.Other comprehensive
income under equity method that can
transfer to gain/loss
2.Change of fair value of
other debt investment
3.Amount of financial
assets re-classify to other
comprehensive income
4.Credit impairment
provision for other debt investment
5.Cash flow hedging
reserve
6.Translation differences
arising on translation of foreign
currency financial statements
7.Other
VI. Total comprehensive income 28409968.93 178613257.52
VII. Earnings per share:
(i) Basic earnings per share
(ii) Diluted earnings per share
Legal Representative: Fu Chunlong
Person in charge of Accounting Works: Lou Hong
Person in charge of Accounting Institution: Liao Zebin
5. Consolidated Cash Flow Statement
In RMB
Item 2020 2019
I. Cash flows arising from operating
activities:
Cash received from selling
commodities and providing labor
services
564587333.62 620842167.97
Net increase of customer deposit
and interbank deposit
Net increase of loan from
central bank
Net increase of capital borrowed
from other financial institution
Cash received from original
insurance contract fee
Net cash received from
reinsurance business
Net increase of insured savings
and investment
Cash received from interest
commission charge and commission
Net increase of capital borrowed
Net increase of returned business
capital
Net cash received by agents in
sale and purchase of securities
Write-back of tax received 3181.09
Other cash received concerning
operating activities
16119424.38 47761005.81
Subtotal of cash inflow arising from
operating activities
580706758.00 668606354.87
Cash paid for purchasing
commodities and receiving labor
service
316124308.90 452350872.20
Net increase of customer loans
and advances
Net increase of deposits in
central bank and interbank
Cash paid for original insurance
contract compensation
Net increase of capital lent
Cash paid for interest
commission charge and commission
Cash paid for bonus of
guarantee slip
Cash paid to/for staff and
workers
55902432.37 62812595.93
Taxes paid 82073162.16 23492145.22
Other cash paid concerning
operating activities
17501551.69 51039388.49
Subtotal of cash outflow arising from
operating activities
471601455.12 589695001.84
Net cash flows arising from operating
activities
109105302.88 78911353.03
II. Cash flows arising from investing
activities:
Cash received from recovering
investment
1372569181.67 2177147001.00
Cash received from investment
income
42049595.57 54752103.23
Net cash received from disposal
of fixed intangible and other
long-term assets
922066.49 834100.00
Net cash received from disposal
of subsidiaries and other units
Other cash received concerning
investing activities
50069962.11 2385849.54
Subtotal of cash inflow from
investing activities
1465610805.84 2235119053.77
Cash paid for purchasing fixed
intangible and other long-term assets
172620388.10 124672512.37
Cash paid for investment 1590780000.00 1758560000.00
Net increase of mortgaged loans
Net cash received from
subsidiaries and other units obtained
Other cash paid concerning
investing activities
5000.00
Subtotal of cash outflow from
investing activities
1763400388.10 1883237512.37
Net cash flows arising from investing
activities
-297789582.26 351881541.40
III. Cash flows arising from financing
activities
Cash received from absorbing
investment
7000000.00 20000000.00
Including: Cash received from
absorbing minority shareholders’
investment by subsidiaries
7000000.00 20000000.00
Cash received from loans 11171759.33 143000000.00
Other cash received concerning
financing activities
24800000.00 15020000.00
Subtotal of cash inflow from
financing activities
42971759.33 178020000.00
Cash paid for settling debts 320934887.55
Cash paid for dividend and
profit distributing or interest paying
21825829.24 7095966.49
Including: Dividend and profit
of minority shareholder paid by
subsidiaries
3767675.45
Other cash paid concerning
financing activities
24800000.00 22962000.00
Subtotal of cash outflow from
financing activities
46625829.24 350992854.04
Net cash flows arising from financing
activities
-3654069.91 -172972854.04
IV. Influence on cash and cash
equivalents due to fluctuation in
exchange rate
132748.11 96.73
V. Net increase of cash and cash
equivalents
-192205601.18 257820137.12
Add: Balance of cash and cash
equivalents at the period -begin
400668257.81 142848120.69
VI. Balance of cash and cash
equivalents at the period -end
208462656.63 400668257.81
Legal Representative: Fu Chunlong
Person in charge of Accounting Works: Lou Hong
Person in charge of Accounting Institution: Liao Zebin
6. Cash Flow Statement of Parent Company
In RMB
Item 2020 2019
I. Cash flows arising from operating
activities:
Cash received from selling
commodities and providing labor
services
40034070.19 39784268.51
Write-back of tax received
Other cash received concerning
operating activities
89340030.37 28770832.18
Subtotal of cash inflow arising from
operating activities
129374100.56 68555100.69
Cash paid for purchasing
commodities and receiving labor
service
Cash paid to/for staff and
workers
25364055.45 18387927.35
Taxes paid 56569832.96 3527628.11
Other cash paid concerning
operating activities
10874977.81 19992731.75
Subtotal of cash outflow arising from
operating activities
92808866.22 41908287.21
Net cash flows arising from operating
activities
36565234.34 26646813.48
II. Cash flows arising from investing
activities:
Cash received from recovering
investment
522000000.00 1260187000.00
Cash received from investment 30170547.80 24870415.22
income
Net cash received from disposal
of fixed intangible and other
long-term assets
Net cash received from disposal
of subsidiaries and other units
Other cash received concerning
investing activities
2385849.54
Subtotal of cash inflow from
investing activities
552170547.80 1287443264.76
Cash paid for purchasing fixed
intangible and other long-term assets
94282308.52 75307375.89
Cash paid for investment 618747000.00 978253000.00
Net cash received from
subsidiaries and other units obtained
Other cash paid concerning
investing activities
Subtotal of cash outflow from
investing activities
713029308.52 1053560375.89
Net cash flows arising from investing
activities
-160858760.72 233882888.87
III. Cash flows arising from financing
activities
Cash received from absorbing
investment
Cash received from loans 11171759.33 143000000.00
Other cash received concerning
financing activities
24800000.00
Subtotal of cash inflow from
financing activities
35971759.33 143000000.00
Cash paid for settling debts 286000000.00
Cash paid for dividend and
profit distributing or interest paying
18104449.44 5999845.45
Other cash paid concerning
financing activities
24800000.00
Subtotal of cash outflow from
financing activities
42904449.44 291999845.45
Net cash flows arising from financing -6932690.11 -148999845.45
activities
IV. Influence on cash and cash
equivalents due to fluctuation in
exchange rate
133134.43
V. Net increase of cash and cash
equivalents
-131093082.06 111529856.90
Add: Balance of cash and cash
equivalents at the period -begin
173702343.04 62172486.14
VI. Balance of cash and cash
equivalents at the period -end
42609260.98 173702343.04
Legal Representative: Fu Chunlong
Person in charge of Accounting Works: Lou Hong
Person in charge of Accounting Institution: Liao Zebin
7. Statement of Changes in Owners’ Equity (Consolidated)
This Period
In RMB
Item
2020
Owners’ equity attributable to the parent Company
Min
ority
inter
ests
Tota
l
own
ers’
equit
y
Sha
re
cap
ital
Other
equity
instrument
Capi
tal
reser
ve
Less
:
Inve
ntor
y
shar
es
Othe
r
com
preh
ensi
ve
inco
me
Reas
onab
le
reser
ve
Surp
lus
reser
ve
Prov
ision
of
gene
ral
risk
Reta
ined
profi
t
Othe
r
Subt
otal
Pre
fer
red
sto
ck
Per
pet
ual
cap
ital
sec
urit
ies
Ot
her
I. Balance at
the end of the
last year
431
05
83
20.
00
431
449
554.
51
264
22.0
0
210
074
88.7
3
387
423
510.
78
127
096
529
6.02
682
477
00.7
7
133
921
299
6.79
Add:
Changes of
accounting
policy
Error
correction of
the last period
Enterprise
combine
under the
same control
Other
II. Balance at
the beginning
of this year
431
05
83
20.
00
431
449
554.
51
264
22.0
0
210
074
88.7
3
387
423
510.
78
127
096
529
6.02
682
477
00.7
7
133
921
299
6.79
III. Increase/
Decrease in
this year
(Decrease is
listed with
“-”)
284
099
6.89
367
183
82.5
6
395
593
79.4
5
587
372
5.57
454
331
05.0
2
(i) Total
comprehensiv
e income
576
638
28.8
9
576
638
28.8
9
264
140
1.02
603
052
29.9
1
(ii) Owners’
devoted and
decreased
capital
700
000
0.00
700
000
0.00
1.Common
shares
invested by
shareholders
700
000
0.00
700
000
0.00
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners equity
with
share-based
payment
4. Other
(III) Profit
distribution
284
099
6.89
-20
945
446.
-18
104
449.
-37
676
75.4
-21
872
124.
33 44 5 89
1. Withdrawal
of surplus
reserves
284
099
6.89
-28
409
96.8
9
2. Withdrawal
of general
risk
provisions
3.
Distribution
for owners (or
shareholders)
-18
104
449.
44
-18
104
449.
44
-37
676
75.4
5
-21
872
124.
89
4. Other
(IV) Carrying
forward
internal
owners’
equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus
reserve
4．Carry-over
retained
earnings from
the defined
benefit plans
5．Carry-over
retained
earnings from
other
comprehensiv
e income
6. Other
(V)
Reasonable
reserve
1. Withdrawal
in the report
period
2. Usage in
the report
period
(VI)Others
IV. Balance at
the end of the
report period
431
05
83
20.
00
431
449
554.
51
264
22.0
0
238
484
85.6
2
424
141
893.
34
131
052
467
5.47
741
214
26.3
4
138
464
610
1.81
Legal Representative: Fu Chunlong
Person in charge of Accounting Works: Lou Hong
Person in charge of Accounting Institution: Liao Zebin
Last Period
In RMB
Item
2019
Owners’ equity attributable to the parent Company
Mino
rity
intere
sts
Total
owne
rs’
equit
y
Sha
re
cap
ital
Other
equity
instrument
Capi
tal
reser
ve
Less
:
Inve
ntor
y
shar
es
Othe
r
com
preh
ensi
ve
inco
me
Reas
onab
le
reser
ve
Surp
lus
reser
ve
Prov
ision
of
gene
ral
risk
Reta
ined
profi
t
Othe
r
Subt
otal
Pr
efe
rre
d
sto
ck
Pe
rpe
tua
l
ca
pit
al
sec
uri
tie
s
Oth
er
I. Balance at
the end of the
last year
297
28
16
00.
00
565
226
274.
51
264
22.0
0
313
991
8.14
184
535
322.
70
105
020
953
7.35
4907
2678
.52
1099
282
215.8
7
Add:
Changes of
624 107 108 3749 1123
accounting
policy
4.84 980
5.36
605
0.20
6.54 546.
74
Error
correction of
the last
period
Enterprise
combine
under the
same
control
Other
II. Balance at
the beginning
of this year
297
28
16
00.
00
565
226
274.
51
264
22.0
0
314
616
2.98
185
615
128.
06
129
558
7.55
4911
0175
.06
1100
405
762.6
1
III. Increase/
Decrease in
this year
(Decrease is
listed with
“-”)
133
77
67
20.
00
-133
776
720.
00
178
613
25.7
5
201
808
382.
72
219
669
708.
47
1913
7525
.71
2388
0723
4.18
(i) Total
comprehensi
ve income
219
669
708.
47
219
669
708.
47
-862
474.2
9
2188
0723
4.18
(ii) Owners’
devoted and
decreased
capital
2000
0000
.00
2000
0000
.00
1.Common
shares
invested by
shareholders
2000
0000
.00
2000
0000
.00
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners
equity with
share-based
105
payment
4. Other
(III) Profit
distribution
178
613
25.7
5
-17
861
325.
75
1.
Withdrawal
of surplus
reserves
178
613
25.7
5
-17
861
325.
75
2.
Withdrawal
of general
risk
provisions
3.
Distribution
for owners
(or
shareholders)
4. Other
(IV) Carrying
forward
internal
owners’
equity
133
77
67
20.
00
-133
776
720.
00
1. Capital
reserves
conversed to
capital (share
capital)
133
77
67
20.
00
-133
776
720.
00
2. Surplus
reserves
conversed to
capital (share
capital)
3.
Remedying
loss with
surplus
reserve
4．Carry-over
retained
earnings
from the
defined
benefit plans
5．Carry-over
retained
earnings
from other
comprehensi
ve income
6. Other
(V)
Reasonable
reserve
1.
Withdrawal
in the report
period
2. Usage in
the report
period
(VI)Others
IV. Balance
at the end of
the report
period
431
05
83
20.
00
431
449
554.
51
264
22.0
0
210
074
88.7
3
387
423
510.
78
127
096
529
6.02
6824
7700
.77
1339
212
996.7
9
Legal Representative: Fu Chunlong
Person in charge of Accounting Works: Lou Hong
Person in charge of Accounting Institution: Liao Zebin
8. Statement of Changes in Owners’ Equity (Parent Company)
This Period
In RMB
Item
2020
Share
capit
al
Other equity
instrument
Capita
l
public
reserv
e
Less:
Invent
ory
shares
Other
compr
ehensi
ve
incom
e
Reaso
nable
reserv
e
Surplu
s
reserv
e
Retai
ned
profi
t
Other
Total
owners’
equity
Prefe
rred
stock
Perp
etual
capit
al
secur
ities
Othe
r
I. Balance at
the end of the
4310 42825 21007 179 106023
last year 5832
0.00
6131.
23
488.7
3
916
021.
60
7961.56
Add:
Changes of
accounting
policy
Error
correction of
the last period
Other
II. Balance at
the beginning
of this year
4310
5832
0.00
42825
6131.
23
21007
488.7
3
179
916
021.
60
106023
7961.56
III. Increase/
Decrease in
this year
(Decrease is
listed with “-”)
2840
996.89
746
452
2.60
103055
19.49
(i) Total
comprehensive
income
284
099
68.9
3
284099
68.93
(ii) Owners’
devoted and
decreased
capital
1.Common
shares
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners equity
with
share-based
payment
4. Other
(III) Profit 2840 -209 -18104
distribution 996.89 454
46.3
3
449.44
1. Withdrawal
of surplus
reserves
2840
996.89
-284
099
6.89
2. Distribution
for owners (or
shareholders)
-181
044
49.4
4
-18104
449.44
3. Other
(IV) Carrying
forward
internal
owners’ equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus reserve
4．Carry-over
retained
earnings from
the defined
benefit plans
5．Carry-over
retained
earnings from
other
comprehensive
income
6. Other
(V)
Reasonable
reserve
1. Withdrawal
in the report
period
2. Usage in the
report period
(VI)Others
IV. Balance at
the end of the
report period
4310
5832
0.00
42825
6131.
23
23848
485.6
2
187
380
544.
20
107054
3481.05
Legal Representative: Fu Chunlong
Person in charge of Accounting Works: Lou Hong
Person in charge of Accounting Institution: Liao Zebin
Last period
In RMB
Item
2019
Shar
e
capit
al
Other equity
instrument
Capit
al
public
reserv
e
Less:
Invent
ory
shares
Other
compr
ehensi
ve
incom
e
Reason
able
reserve
Surpl
us
reserv
e
Retaine
d profit
Other
Total
owners’
equity
Pref
erre
d
stoc
k
Perp
etual
capit
al
secu
ritie
s
Othe
r
I. Balance at
the end of the
last year
297
281
600.
00
5620
3285
1.23
3139
918.
14
18545
850.31
881000
219.68
Add:
Changes of
accounting
policy
6244
.84
61823
9.52
624484.
36
Error
correction of
the last
period
Other
II. Balance at
the beginning
of this year
297
281
600.
00
5620
3285
1.23
3146
162.
98
19164
089.83
881624
704.04
III. Increase/
Decrease in
this year
(Decrease is
listed with
“-”)
133
776
720.
00
-1337
7672
0.00
1786
1325
.75
16075
1931.7
7
178613
257.52
(i) Total
comprehensiv
e income
17861
3257.5
2
178613
257.52
(ii) Owners’
devoted and
decreased
capital
1.Common
shares
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners equity
with
share-based
payment
4. Other
(III) Profit
distribution
1786
1325
.75
-17861
325.75
1.
Withdrawal
of surplus
reserves
1786
1325
.75
-17861
325.75
2.
Distribution
for owners
(or
shareholders)
3. Other
(IV) Carrying
forward
internal
owners’
equity
133
776
720.
00
-1337
7672
0.00
1. Capital
reserves
conversed to
capital (share
capital)
133
776
720.
00
-1337
7672
0.00
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus
reserve
4．Carry-over
retained
earnings from
the defined
benefit plans
5．Carry-over
retained
earnings from
other
comprehensiv
e income
6. Other
(V)
Reasonable
reserve
1.
Withdrawal
in the report
period
2. Usage in
the report
period
(VI)Others
IV. Balance at
the end of the
report period
431
058
320.
00
4282
5613
1.23
2100
7488
.73
17991
6021.6
0
106023
7961.56
Legal Representative: Fu Chunlong
Person in charge of Accounting Works: Lou Hong
Person in charge of Accounting Institution: Liao Zebin
Shenzhen Tellus Holding Co. Ltd.Notes to the Financial Statements
For the year ended 31 December 2020
（All amounts are expressed in Chinese Yuan(“CNY”)unless otherwise stated）
Note 1. BASIC INFORMATIONABOUT THE COMPANY
1.1 Corporate Information
Shenzhen Tellus Holding Co. Ltd. (“ the Company” ) was developed from the Shenzhen Tellus Machinery Co.Ltd. whichestablished on 11 October 1986. On 2nd January 1992 with the approval of Shenzhen Municipal People’s Government “shen fuban fu (1992) No. 1850” Shenzhen Tellus Machinery Co.Ltd. reorganized to a public limited Company and renamed to ShenzhenTellus Machinery Holding Company Limited. On 15 March 1993 with the approval of Bank of China Shenzhen branch “Shen RenYin Fu Zi (1993) No.92” the Company issued the initial public registered shares and turned into Limited Liability Company with the
name of “Tellus mechanical and electrical co. LTD Shenzhen”. At this moment the whole share capital is 166.88million shares
including the original 120.9million shares with 45.98million new shares. The new shares is divided into two parts one is CNY 25.98
million ordinary shares (A shares) the other is special shares (B) CNY 20 million shares .In June 1993 Shenzhen securities management office was about to agree that “Tellus mechanical and electrical co. LTD Shenzhen“was qualified to list in Shenzhenstock exchange market(shen zheng ban fu[1993]34) and (shen zheng shi zi [1993]22).On 30 June
1994 the Company changed name to Shenzhen Tellus Holding Company Limited with the approval of Shenzhen administrative
bureau for industry and commerce .
According to the decision made by general meeting of shareholders in 1993 the Company distributed a 2 for 10 bonus shares with
cash dividend of CNY 0.5. The whole capital changed into 200256000 shares.
On 28 May 1995 the Group shareholder meeting agreed about plan of distributing bonus and increasing capital. On the basis of
200256000 shares in the end of 1994 the Group distributed 0.5 of 10 shares and give CNY 0.5 from every increasing 0.5 share
capital. After the Group’s share capital increased to 220281600 shares.
According to the 19th special meeting of the 7th Board Meeting on April 21st2015 and the 4th stockholders’ meeting on June 3rd
2015 the Company private issued CNY ordinary shares (A shares) 77000000.00 shares to Shenzhen Tefa Group Co. and Shenzhen
Yuanzhifuhai Jewerly Investment Co. After plan the Company’s capital increased to 297281600 shares.
According to the decision made by general meeting of shareholders in 2018 the Company distributed a 4.5 for 10 bonus shares. The
whole capital changed into 431058320.00 shares.The Company’s principal operating activities are: auto sales maintenance and inspection sales of jewelry property leasing and
services etc.The financial statements were approved and authorized for issue upon the resolution of the Company’s Board of Directors meeting
on April 152021.
1.2 Scope of Consolidation
(a) Incorporated subsidiaries of the Company
At 31 December 2020 subsidiaries of the Company are as follows:
Sequence
Number
Name of Subsidiaries
Abbreviation of
Subsidiaries
Proportion of
Shareholding (or similar
equity interest) (%)
Direct Indirect
1深圳市特力新永通汽车发展有限
公 司 (Shenzhen Tellus
Xinyongtong Automobile
Development Co. Ltd.*)
Xinyongtong
Automobile
100.00
2深圳市宝安石泉实业有限公司
(Shenzhen Bao ’ an Shiquan
Industrial Co. Ltd.*)
Bao’an Shiquan 100.00
3深圳市特发特力房地产有限公司
(Shenzhen SDG Tellus Real Estate
Co. Ltd.*)
SDG Tellus Real
Estate
100.00
4深圳市特力创盈科技有限公司
(Shenzhen Tellus Chuangying
Technology Co. Ltd.*)
Chuangying
Technology
100.00
5
Shenzhen Xinyongtong Auto
Vehicle Inspection Equipment Co.Ltd.Xinyongtong
Inspection
51.00
6深圳市汽车工业贸易有限公司
(Shenzhen Automobile Industry and
Trade Co. Ltd.*)
Automobile Industry
and Trade
100.00
7
深 圳 市 汽 车 工 业 供 销 公 司
(Shenzhen Automobile Industry
Automobile Industry
Supply and
100.00
Sequence
Number
Name of Subsidiaries
Abbreviation of
Subsidiaries
Proportion of
Shareholding (or similar
equity interest) (%)
Direct Indirect
Supply and Marketing Co. Ltd.*) Marketing
8深圳特发华日汽车企业有限公司
(Shenzhen SDG Huari Automobile
Enterprise Co. Ltd.*)
Huari Automobile 60.00
9深圳市华日安信汽车检测有限公
司 (Shenzhen Huari Anxin
Automobile Inspection Co. Ltd.*)
Anxin Automobile
Inspection
100.00
10
深 圳 市 中 天 实 业 有 限 公 司
(Shenzhen Zhongtian Industrial Co.Ltd.*)
Zhongtian 100.00
11深圳市华日丰田汽车销售服务有
限 公 司 (Shenzhen Huari Toyota
Auto Sales Service Co. Ltd.*)
Huari Toyota 60.00
12安徽特力星光珠宝投资有限公司
(Anhui Tellus Seon Jewelry
Investment Co. Ltd.*)
Tellus Seon Jewelry 51.00
13安徽特力星光金尊珠宝有限公司
(Anhui Tellus Seon Jinzun Jewelry
Co. Ltd.*)
Tellus Seon Jinzun 60.00
14
四 川 特 力 珠 宝 科 技 有 限 公 司
(Sichuan Tellus Jewelry Technology
Co. Ltd.*)
Sichuan Tellus 66.67
15深圳市特力宝库供应链科技有限
公 司 (Shenzhen Tellus Baoku
Supply Chain Technology Co.Ltd.*)
Tellus Baoku 100.00
16
深 圳 珠 宝 产 业 服 务 有 限 公 司
(Shenzhen Jewelry Industry Service
Co. Ltd.*)
Shenzhen Jewelry 65.00
For details of the subsidiaries mentioned above please refer to Note 7 INTEREST IN OTHER ENTITIES
(b) Change of the scope of consolidation
The newly incorporated subsidiaries during the reporting period are as follows:
Sequence
Number
Name of Subsidiaries
Abbreviation of
Subsidiaries
Reporting Period Reason of
Incorporation
1
Shenzhen Jewelry
Industry Service Co. Ltd.Shenzhen Jewelry 2020 Set up
For the detail of the change of consolidation scope please refer to Note 6 CHANGES IN THE SCOPE OF CONSOLIDATION.
Note 2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
2.1 Basis of Preparation
Based on going concern according to actually occurred transactions and events the Company prepares its financial statements in
accordance with the Accounting Standards for Business Enterprises – Basic standards and concrete accounting standards
Accounting Standards for Business Enterprises – Application Guidelines Accounting Standards for Business Enterprises –Interpretations and other relevant provisions (collectively known as “Accounting Standards for Business Enterprises issued byMinistry of Finance of PRC”).
2.2 Going Concern
The Company has assessed its ability to continually operate for the next twelve months from the end of the reporting period and no
any matters that may result in doubt on its ability as a going concern were noted. Therefore it is reasonable for the Company to
prepare financial statements on the going concern basis.Note 3. SIGNIFICANTACCOUNTING POLICIES ANDACCOUNTING ESTIMATES
The following significant accounting policies and accounting estimates of the Company are formulated in accordance with the
Accounting Standards for Business Enterprises. Businesses not mentioned are complied with relevant accounting policies of the
Accounting Standards for Business Enterprises.
3.1 Statement of Compliance with the Accounting Standards for Business Enterprises
The Company prepares its financial statements in accordance with the requirements of the Accounting Standards for Business
Enterprises truly and completely reflecting the Company’s financial position as at 31 December 2020 and its operating results
changes in shareholders' equity cash flows and other related information for the year then ended.3.2 Accounting Period
The accounting year of the Company is from January 1 to December 31 in calendar year.
3.3 Operating Cycle
The normal operating cycle of the Company is twelve months.
3.4 Functional Currency
The Company takes Chinese Yuan (“CNY”) as the functional currency.The Company’s overseas subsidiaries choose the currency of the primary economic environment in which the subsidiaries operate as
the functional currency.
3.5 Accounting Treatment of Business Combinations under and not under Common Control
(a) Business combinations under common control
The assets and liabilities that the Company obtains in a business combination under common control shall be measured at their
carrying amount of the acquired entity at the combination date. If the accounting policy adopted by the acquired entity is different
from that adopted by the acquiring entity the acquiring entity shall according to accounting policy it adopts adjust the relevant items
in the financial statements of the acquired party based on the principal of materiality. As for the difference between the carrying
amount of the net assets obtained by the acquiring entity and the carrying amount of the consideration paid by it the capital reserve
(capital premium or share premium) shall be adjusted. If the capital reserve (capital premium or share premium) is not sufficient to
absorb the difference any excess shall be adjusted against retained earnings.
For the accounting treatment of business combination under common control by step acquisitions please refer to Note 3.6 (6).
(b) Business combinations not under common control
The assets and liabilities that the Company obtains in a business combination not under common control shall be measured at their
fair value at the acquisition date. If the accounting policy adopted by the acquired entity is different from that adopted by the
acquiring entity the acquiring entity shall according to accounting policy it adopts adjust the relevant items in the financial
statements of the acquired entity based on the principal of materiality. The acquiring entity shall recognize the positive balance
between the combination costs and the fair value of the identifiable net assets it obtains from the acquired entity as goodwill. The
acquiring entity shall pursuant to the following provisions treat the negative balance between the combination costs and the fair
value of the identifiable net assets it obtains from the acquired entity:
(i) It shall review the measurement of the fair values of the identifiable assets liabilities and contingent liabilities it obtains from the
acquired entity as well as the combination costs;
(ii) If after the review the combination costs are still less than the fair value of the identifiable net assets it obtains from the acquired
entity the balance shall be recognized in profit or loss of the reporting period.
For the accounting treatment of business combination under the same control by step acquisitions please refer to Note 3.6 (f).
(c) Treatment of business combination related costs
The intermediary costs such as audit legal services and valuation consulting and other related management costs that are directly
attributable to the business combination shall be charged in profit or loss in the period in which they are incurred. The costs to issue
equity or debt securities for the consideration of business combination shall be recorded as a part of the value of the respect equity or
debt securities upon initial recognition.
3.6 Method of Preparing the Consolidated Financial Statements
(a) Scope of consolidation
The scope of consolidated financial statements shall be determined on the basis of control. It not only includes subsidiaries
determined based on voting power (or similar) or other arrangement but also structured entities under one or several contract
arrangements.
Control exists when the Company has all the following: power over the investee; exposure or rights to variable returns from the
Company’s involvement with the investee; and the ability to use its power over the investee to affect the amount of the investor’s
returns. Subsidiaries are the entities that controlled by the Company (including enterprise a divisible part of the investee and
structured entity controlled by the enterprise). A structured entity (sometimes called a Special Purpose Entity) is an entity that has
been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity.(b) Special requirement as the parent Company is an investment entity
If the parent Company is an investment entity it should measure its investments in particular subsidiaries as financial assets at fair
value through profit or loss instead of consolidating those subsidiaries in its consolidated and separate financial statements. However
as an exception to this requirement if a subsidiary provides investment-related services or activities to the investment entity it should
be consolidated.The parent Company is defined as investment entity when meets following conditions:
a. Obtains funds from one or more investors for the purpose of providing those investors with investment management services;
b. Commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation investment income
or both; and
c. Measures and evaluates the performance of substantially all of its investments on a fair value basis.If the parent Company becomes an investment entity it shall cease to consolidate its subsidiaries at the date of the change in status
except for any subsidiary which provides investment-related services or activities to the investment entity shall be continued to be
consolidated. The deconsolidation of subsidiaries is accounted for as though the investment entity partially disposed subsidiaries
without loss of control.When the parent Company previously classified as an investment entity ceases to be an investment entity subsidiary that was
previously measured at fair value through profit or loss shall be included in the scope of consolidated financial statements at the date
of the change in status. The fair value of the subsidiary at the date of change represents the transferred deemed consideration in
accordance with the accounting for business combination not under common control.(c) Method of preparing the consolidated financial statements
The consolidated financial statements shall be prepared by the Company based on the financial statements of the Company and its
subsidiaries and using other related information.When preparing consolidated financial statements the Company shall consider the entire group as an accounting entity adopt
uniform accounting policies and apply the requirements of Accounting Standard for Business Enterprises related to recognition
measurement and presentation. The consolidated financial statements shall reflect the overall financial position operating results and
cash flows of the group.(i) Like items of assets liabilities equity income expenses and cash flows of the parent are combined with those of the subsidiaries.(ii) The carrying amount of the parent’s investment in each subsidiary is eliminated (off-set) against the parent’s portion of equity of
each subsidiary.(iii) Eliminate the impact of intragroup transactions between the Company and the subsidiaries or between subsidiaries and when
intragroup transactions indicate an impairment of related assets the losses shall be recognized in full.(iv) Make adjustments to special transactions from the perspective of the group.(d) Method of preparation of the consolidated financial statements
when subsidiaries are acquired or disposed in the reporting period
(i) Acquisition of subsidiaries or business
A.Subsidiaries or business acquired through business combination under common control
When preparing consolidated statements of financial position the opening balance of the consolidated balance sheet shall be adjusted.Related items of comparative financial statements shall be adjusted as well deeming that the combined entity has always existed ever
since the ultimate controlling party began to control.Incomes expenses and profits of the subsidiary incurred from the beginning of the reporting period to the end of the reporting period
shall be included into the consolidated statement of profit or loss. Related items of comparative financial statements shall be adjusted
as well deeming that the combined entity has always existed ever since the ultimate controlling party began to control.
Cash flows from the beginning of the reporting period to the end of the reporting period shall be included into the consolidated
statement of cash flows. Related items of comparative financial statements shall be adjusted as well deeming that the combined
entity has always existed ever since the ultimate controlling party began to control.
B.Subsidiaries or business acquired through business combination not under common control
When preparing the consolidated statements of financial position the opening balance of the consolidated statements of financial
position shall not be adjusted.Incomes expenses and profits of the subsidiary incurred from the acquisition date to the end of the reporting period shall be included
into the consolidated statement of profit or loss.
Cash flows from the acquisition date to the end of the reporting period shall be included into the consolidated statement of cash
flows.(ii) Disposal of subsidiaries or business
When preparing the consolidated statements of financial position the opening balance of the consolidated statements of financial
position shall not be adjusted.Incomes expenses and profits incurred from the beginning of the subsidiary to the disposal date shall be included into the
consolidated statement of profit or loss.
Cash flows from the beginning of the subsidiary to the disposal date shall be included into the consolidated statement of cash flows.
(e) Special consideration in consolidation elimination
(i) Long-term equity investment held by the subsidiaries to the Company shall be recognized as treasury stock of the Company
which is offset with the owner’s equity represented as “treasury stock” under “owner’s equity” in the consolidated statement
of financial position.Long-term equity investment held by subsidiaries between each other is accounted for taking long-term equity investment held by the
Company to its subsidiaries as reference. That is the long-term equity investment is eliminated (off- set) against the portion of the
corresponding subsidiary’s equity.(ii) Due to not belonging to paid-in capital (or share capital) and capital reserve and being different from retained earnings and
undistributed profit “Specific reserves” and “General risk provision” shall be recovered based on the proportion attributable to
owners of the parent Company after long-term equity investment to the subsidiaries is eliminated with the subsidiaries’ equity.(iii) If temporary timing difference between the book value of the assets and liabilities in the consolidated statement of financial
position and their tax basis is generated as a result of elimination of unrealized inter-Company transaction profit or loss deferred tax
assets of deferred tax liabilities shall be recognized and income tax expense in the consolidated statement of profit or loss shall be
adjusted simultaneously excluding deferred taxes related to transactions or events directly recognized in owner’s equity or business
combination.(iv) Unrealised inter-Company transactions profit or loss generated from the Company selling assets to its subsidiaries shall be
eliminated against“net profit attributed to the owners of the parent Company” in full. Unrealized inter-Company transactions profitor loss generated from the subsidiaries selling assets to the Company shall be eliminated between“net profit attributed to the ownersof the parent Company” and “non-controlling interests” pursuant to the proportion of the Company in the related subsidiaries.Unrealized inter-Company transactions profit or loss generated from the assets sales between the subsidiaries shall be eliminated
between “net profit attributed to the owners of the parent Company” and “non-controlling interests” pursuant to the proportion
of the Company in the selling subsidiaries.(v) If loss attributed to the minority shareholders of a subsidiary in current period is more than the proportion of non-controlling
interest in this subsidiary at the beginning of the period non-controlling interest is still to be written down.(f) Accounting for Special Transactions
(i) Purchasing of non-controlling interests
Where the Company purchases non-controlling interests of its subsidiary in the separate financial statements of the Company the
cost of the long-term equity investment obtained in purchasing non-controlling interests is measured at the fair value of the
consideration paid. In the consolidated financial statements difference between the cost of the long-term equity investment newly
obtained in purchasing non-controlling interests and share of the subsidiary’s net assets from the acquisition date or combination date
continuingly calculated pursuant to the newly acquired shareholding proportion shall be adjusted into capital reserve (capital
premium or share premium). If capital reserve is not enough to be offset surplus reserve and undistributed profit shall be offset in
turn.(ii) Gaining control over the subsidiary in stages through multiple transactions
A.Business combination under common control in stages through multiple transactions
On the combination date in the separate financial statement initial cost of the long-term equity investment is determined according
to the share of carrying amount of the acquiree’s net assets in the ultimate controlling entity’s consolidated financial statements after
combination. The difference between the initial cost of the long-term equity investment and the carrying amount of the long -term
investment held prior of control plus book value of additional consideration paid at acquisition date is adjusted into capital reserve
(capital premium or share premium). If the capital reserve is not enough to absorb the difference any excess shall be adjusted against
surplus reserve and undistributed profit in turn.In the consolidated financial statements the assets and liabilities acquired during the combination should be recognized at their
carrying amount in the ultimate controlling entity’s consolidated financial statements on the combination date unless any adjustment
is resulted from the difference in accounting policies. The difference between the carrying amount of the investment held prior of
control plus book value of additional consideration paid on the acquisition date and the net assets acquired through the combination is
adjusted into capital reserve (capital premium or share premium). If the capital reserve is not enough to absorb the difference any
excess shall be adjusted against retained earnings.If the acquiring entity holds equity investment in the acquired entity prior to the combination date and the equity investment is
accounted for under the equity method related profit or loss other comprehensive income and other changes in equity which have
been recognized during the period from the later of the date of the Company obtaining original equity interest and the date of both the
acquirer and the acquiree under common control of the same ultimate controlling party to the combination date should be offset
against the opening balance of retained earnings at the comparative financial statements period respectively.
B.Business combination not under common control in stages through multiple transactions
On the consolidation date in the separate financial statements the initial cost of long-term equity investment is determined according
to the carrying amount of the original long-term investment plus the cost of new investment.In the consolidated financial statements the equity interest of the acquired entity held prior to the acquisition date shall be
re-measured at its fair value on the acquisition date. Difference between the fair value of the equity interest and its book value is
recognized as investment income. The other comprehensive income related to the equity interest held prior to the acquisition date
calculated through equity method should be transferred to current investment income of the acquisition period excluding other
comprehensive income resulted from the remeasurement of the net assets or net liabilities under defined benefit plan. The Company
shall disclose acquisition-date fair value of the equity interest held prior to the acquisition date and the related gains or losses due to
the remeasurement based on fair value.(iii) Disposal of investment in subsidiaries without a loss of control
For partial disposal of the long-term equity investment in the subsidiaries without a loss of control when the Company prepares
consolidated financial statements difference between consideration received from the disposal and the corresponding share of
subsidiary’s net assets cumulatively calculated from the acquisition date or combination date shall be adjusted into capital reserve
(capital premium or share premium). If the capital reserve is not enough to absorb the difference any excess shall be offset against
retained earnings.(iv) Disposal of investment in subsidiaries with a loss of control
A.Disposal through one transaction
If the Company loses control in an investee through partial disposal of the equity investment when the consolidated financial
statements are prepared the retained equity interest should be re-measured at fair value at the date of loss of control. The difference
between i) the fair value of consideration received from the disposal plus non-controlling interest retained; ii) share of the former
subsidiary’s net assets cumulatively calculated from the acquisition date or combination date according to the original proportion of
equity interest shall be recognized in current investment income when control is lost.Moreover other comprehensive income and other changes in equity related to the equity investment in the former subsidiary shall be
transferred into current investment income when control is lost excluding other comprehensive income resulted from the
remeasurement of the movement of net assets or net liabilities under defined benefit plan.
B.Disposal in stages
In the consolidated financial statements whether the transactions should be accounted for as “a single transaction” needs to be
decided firstly.If the disposal in stages should not be classified as “a single transaction” in the separate financial statements for transactions prior
of the date of loss of control carrying amount of each disposal of long-term equity investment need to be recognized and the
difference between consideration received and the carrying amount of long-term equity investment corresponding to the equity
interest disposed should be recognized in current investment income; in the consolidated financial statements the disposaltransaction should be accounted for according to related policy in“Disposal of long-term equity investment in subsidiaries without aloss of control”.If the disposal in stages should be classified as “ a single transaction” these transactions should be accounted for as a single
transaction of disposal of subsidiary resulting in loss of control. In the separate financial statements for each transaction prior of the
date of loss of control difference between consideration received and the carrying amount of long-term equity investment
corresponding to the equity interest disposed should be recognized as other comprehensive income firstly and transferred to profit or
loss as a whole when control is lost; in the consolidated financial statements for each transaction prior of the date of loss of control
difference between consideration received and proportion of the subsidiary’s net assets corresponding to the equity interest disposed
should be recognized in profit or loss as a whole when control is lost.In considering of the terms and conditions of the transactions as well as their economic impact the presence of one or more of the
following indicators may lead to account for multiple transactions as a single transaction:
(a) The transactions are entered into simultaneously or in contemplation of one another.(b) The transactions form a single transaction designed to achieve an overall commercial effect.(c) The occurrence of one transaction depends on the occurrence of at least one other transaction.(d) One transaction when considered on its own merits does not make economic sense but when considered together with the other
transaction or transactions would be considered economically justifiable.(iii) Diluting equity share of parent Company in its subsidiaries due to additional capital injection by the subsidiaries’ minority
shareholders.Other shareholders (minority shareholders) of the subsidiaries inject additional capital in the subsidiaries which resulted in the
dilution of equity interest of parent Company in these subsidiaries. In the consolidated financial statements difference between share
of the corresponding subsidiaries’ net assets calculated based on the parent’s equity interest before and after the capital injection
shall be adjusted into capital reserve (capital premium or share premium). If the capital reserve is not enough to absorb the difference
any excess shall be adjusted against retained earnings.
3.7 Classification of Joint Arrangements and Accounting for Joint Operation
A joint arrangement is an arrangement of which two or more parties have joint control. Joint arrangement of the Company is
classified as either a joint operation or a joint venture.(a) Joint operation
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets and
obligations for the liabilities relating to the arrangement.The Company shall recognize the following items in relation to shared interest in a joint operation and account for them in
accordance with relevant accounting standards of the Accounting Standards for Business Enterprises:
(i) its assets including its share of any assets held jointly;
(ii) its liabilities including its share of any liabilities incurred jointly;
(iii) its revenue from the sale of its share of the output arising from the joint operation;
(iv) its share of the revenue from the sale of the output by the joint operation; and
(v) its expenses including its share of any expenses incurred jointly.(b) Joint venture
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of
the arrangement.The Company accounts for its investment in the joint venture by applying the equity method of long-term equity investment.
3.8 Cash and Cash Equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents include short-term (generally
within three months of maturity at acquisition) highly liquid investments that are readily convertible into known amounts of cash and
which are subject to an insignificant risk of changes in value.
3.9 Foreign Currency Transactions and Translation of Foreign Currency Financial
Statements
(a) Determination of the exchange rate for foreign currency
transactions
At the time of initial recognition of a foreign currency transaction the amount in the foreign currency shall be translated into the
amount in the functional currency at the spot exchange rate of the transaction date or at an exchange rate which is determined
through a systematic and reasonable method and is approximate to the spot exchange rate of the transaction date (hereinafter referred
to as the approximate exchange rate).(b) Translation of monetary items denominated in foreign currency on
the balance sheet date
The foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet date. The balance of exchange
arising from the difference between the spot exchange rate on the balance sheet date and the spot exchange rate at the time of initial
recognition or prior to the balance sheet date shall be recorded into the profits and losses at the current period. The foreign currency
non-monetary items measured at the historical cost shall still be translated at the spot exchange rate on the transaction date; for the
foreign currency non-monetary items restated to a fair value measurement shall be translated into the at the spot exchange rate at the
date when the fair value was determined the difference between the restated functional currency amount and the original functional
currency amount shall be recorded into the profits and losses at the current period.(c) Translation of foreign currency financial statements
Before translating the financial statements of foreign operations the accounting period and accounting policy shall be adjusted so as
to conform to the Company. The adjusted foreign operation financial statements denominated in foreign currency (other than
functional currency) shall be translated in accordance with the following method:
(i) The asset and liability items in the statement of financial position shall be translated at the spot exchange rates at the date of
that statement of financial position.. The owners’ equity items except undistributed profit shall be translated at the spot exchange
rates when they are incurred.(ii) The income and expense items in the statement of profit and other comprehensive income shall be translated at the spot
exchange rates or approximate exchange rate at the date of transaction. Foreign currency cash flows and cash flows of foreign
subsidiaries shall be translated at the spot exchange rate or approximate exchange rate when the cash flows are incurred. The effect of
exchange rate changes on cash is presented separately in the statement of cash flows as an adjustment item.(iv) The differences arising from the translation of foreign currency financial statements shall be presented separately as “othercomprehensive income” under the owners’ equity items of the consolidated statement of financial position.When disposing a foreign operation involving loss of control the cumulative amount of the exchange differences relating to that
foreign operation recognized under other comprehensive income in the statement of financial position shall be reclassified into
current profit or loss according to the proportion disposed.
3.10 Financial Instruments
Financial instrument is any contract which gives rise to both a financial asset of one entity and a financial liability or equity
instrument of another entity.(a) Recognition and derecognition of financial instrument
A financial asset or a financial liability should be recognized in the statement of financial position when and only when an entity
becomes party to the contractual provisions of the instrument.
A financial asset can only be derecognized when meets one of the following conditions:
(i) The rights to the contractual cash flows from a financial asset expire
(ii) The financial asset has been transferred and meets one of the following derecognition conditions:
Financial liabilities (or part thereof) are derecognized only when the liability is extinguished—i.e. when the obligation specified in
the contract is discharged or cancelled or expires. An exchange of the Company (borrower) and lender of debt instruments that carry
significantly different terms or a substantial modification of the terms of an existing liability are both accounted for as an
extinguishment of the original financial liability and the recognition of a new financial liability.Purchase or sale of financial assets in a regular-way shall be recognized and derecognized using trade date accounting. A regular-way
purchase or sale of financial assets is a transaction under a contract whose terms require delivery of the asset within the time frame
established generally by regulations or convention in the market place concerned. Trade date is the date at which the entity commits
itself to purchase or sell an asset.(b) Classification and measurement of financial assets
At initial recognition the Company classified its financial asset based on both the business model for managing the financial asset
and the contractual cash flow characteristics of the financial asset: financial asset at amortized cost financial asset at fair value
through profit or loss (FVTPL) and financial asset at fair value through other comprehensive income (FVTOCI). Reclassification of
financial assets is permitted if and only if the objective of the entity’s business model for managing those financial assets changes.In this circumstance all affected financial assets shall be reclassified on the first day of the first reporting period after the changes in
business model; otherwise the financial assets cannot be reclassified after initial recognition.
Financial assets shall be measured at initial recognition at fair value. For financial assets measured at FVTPL transaction costs are
recognized in current profit or loss. For financial assets not measured at FVTPL transaction costs should be included in the initial
measurement. Notes receivable or accounts receivable that arise from sales of goods or rendering of services are initially measured at
the transaction price defined in the accounting standard of revenue where the transaction does not include a significant financing
component.Subsequent measurement of financial assets will be based on their categories:
(i)Financial asset at amortized cost
The financial asset at amortized cost category of classification applies when both the following conditions are met: the financial asset
is held within the business model whose objective is to hold financial assets in order to collect contractual cash flows and the
contractual term of the financial asset gives rise on specified dates to cash flows that are solely payment of principal and interest on
the principal amount outstanding. These financial assets are subsequently measured at amortized cost by adopting the effective
interest rate method. Any gain or loss arising from derecognition according to the amortization under effective interest rate method or
impairment are recognized in current profit or loss.(ii)Financial asset at fair value through other comprehensive income (FVTOCI)
The financial asset at FVTOCI category of classification applies when both the following conditions are met: the financial asset is
held within the business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and
the contractual term of the financial asset gives rise on specified dates to cash flows that are solely payment of principle and interest
on the principal amount outstanding. All changes in fair value are recognized in other comprehensive income except for gain or loss
arising from impairment or exchange differences which should be recognized in current profit or loss. At derecognition cumulative
gain or loss previously recognized under OCI is reclassified to current profit or loss. However interest income calculated based on
the effective interest rate is included in current profit or loss.The Company make an irrevocable decision to designate part of non-trading equity instrument investments as measured through
FVTOCI. All changes in fair value are recognized in other comprehensive income except for dividend income recognized in current
profit or loss. At derecognition cumulative gain or loss are reclassified to retained earnings.(iii)Financial asset at fair value through profit or loss (FVTPL)
Financial asset except for above mentioned financial asset at amortized cost or financial asset at fair value through other
comprehensive income (FVTOCI) should be classified as financial asset at fair value through profit or loss (FVTPL). These financial
assets should be subsequently measured at fair value. All the changes in fair value are included in current profit or loss.(c) Classification and measurement of financial liabilities
The Company classified the financial liabilities as financial liabilities at fair value through profit or loss (FVTPL) loan commitments
at a below-market interest rate and financial guarantee contracts and financial asset at amortized cost.Subsequent measurement of financial assets will be based on the classification:
(i)Financial liabilities at fair value through profit or loss (FVTPL)
Held-for-trading financial liabilities (including derivatives that are financial liabilities) and financial liabilities designated at FVTPL
are classified as financial liabilities at FVTP. After initial recognition any gain or loss (including interest expense) are recognized in
current profit or loss except for those hedge accounting is applied. For financial liability that is designated as at FVTPL changes in
the fair value of the financial liability that is attributable to changes in the own credit risk of the issuer shall be presented in other
comprehensive income. At derecognition cumulative gain or loss previously recognized under OCI is reclassified to retained
earnings.(ii)Loan commitments and financial guarantee contracts
Loan commitment is a commitment by the Company to provide a loan to customer under specified contract terms. The provision of
impairment losses of loan commitments shall be recognized based on expected credit losses model.
Financial guarantee contract is a contract that requires the Company to make specified payments to reimburse the holder for a loss it
incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt
instrument. Financial guarantee contracts liability shall be subsequently measured at the higher of: The amount of the loss allowance
recognized according to the impairment principles of financial instruments; and the amount initially recognized less the cumulative
amount of income recognized in accordance with the revenue principles.(iii)Financial liabilities at amortized cost
After initial recognition the Company measured other financial liabilities at amortized cost using the effective interest method.
Except for special situation financial liabilities and equity instrument should be classified in accordance with the following
principles:
(i) If the Company has no unconditional right to avoid delivering cash or another financial instrument to fulfill a contractual
obligation this contractual obligation meet the definition of financial liabilities. Some financial instruments do not comprise terms
and conditions related to obligations of delivering cash or another financial instrument explicitly they may include contractual
obligation indirectly through other terms and conditions.(ii) If a financial instrument must or may be settled in the Company's own equity instruments it should be considered that the
Company’s own equity instruments are alternatives of cash or another financial instrument or to entitle the holder of the equity
instruments to sharing the remaining rights over the net assets of the issuer. If the former is the case the instrument is a liability of
the issuer; otherwise it is an equity instrument of the issuer. Under some circumstances it is regulated in the contract that the
financial instrument must or may be settled in the Company's own equity instruments where amount of contractual rights and
obligations are calculated by multiplying the number of the equity instruments to be available or delivered by its fair value upon
settlement. Such contracts shall be classified as financial liabilities regardless that the amount of contractual rights and liabilities is
fixed or fluctuate totally or partially with variables other than market price of the entity’s own equity instruments (such as interest
rate price of some kind of goods or some kind of financial instrument).(d) Derivatives and embedded derivatives
At initial recognition derivatives shall be measured at fair value at the date of derivative contracts are signed and subsequently
measured at fair value. The derivative with a positive fair value shall be recognized as an asset and with a negative fair value shall be
recognized as a liability.Gains or losses arising from the changes in fair value of derivatives shall be recognized directly into current profit or loss except for
the effective portion of cash flow hedges which shall be recognized in other comprehensive income and reclassified into current
profit or loss when the hedged items affect profit or loss.
An embedded derivative is a component of a hybrid contract with a financial asset as a host the Company shall apply the
requirements of financial asset classification to the entire hybrid contract. If a host that is not a financial asset and the hybrid contract
is not measured at fair value with changes in fair value recognized in profit or loss and the economic characteristics and risks of the
embedded derivative are not closely related to the economic characteristics and risks of the host and a separate instrument with the
same terms as the embedded derivative would meet the definition of a derivative the embedded derivative shall be separated from
the hybrid instrument and accounted for as a separate derivative instrument. If the Company is unable to measure the fair value of the
embedded derivative at the acquisition date or subsequently at the balance sheet date the entire hybrid contract is designated as
financial assets or financial liabilities at fair value through profit or loss.(e) Impairment of financial instrument
The Company shall recognize a loss allowance based on expected credit losses on a financial asset that is measured at amortized cost
a debt investment at fair value through other comprehensive income a contract asset a lease receivable a loan commitment and a
financial guarantee contract.(i) Measurement of expected credit losses
Expected credit losses are the weighted average of credit losses of the financial instruments with the respective risks of a default
occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Company in accordance
with the contract and all the cash flows that the Company expects to receive (ie all cash shortfalls) discounted at the original
effective interest rate or credit- adjusted effective interest rate for purchased or originated credit-impaired financial assets.Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a
financial instrument.
12-month expected credit losses are the portion of lifetime expected credit losses that represent the expected credit losses that result
from default events on a financial instrument that are possible within the 12 months after the reporting date (or the expected lifetime
if the expected life of a financial instrument is less than 12 months).
At each reporting date the Company classifies financial instruments into three stages and makes provisions for expected credit losses
accordingly. A financial instrument of which the credit risk has not significantly increased since initial recognition is at stage 1. The
Company shall measure the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. A
financial instrument with a significant increase in credit risk since initial recognition but is not considered to be credit-impaired is at
stage 2. The Company shall measure the loss allowance for that financial instrument at an amount equal to the lifetime expected
credit losses. A financial instrument is considered to be credit-impaired as at the end of the reporting period is at stage 3. The
Company shall measure the loss allowance for that financial instrument at an amount equal to the lifetime expected credit losses.
The Company may assume that the credit risk on a financial instrument has not increased significantly since initial recognition if the
financial instrument is determined to have low credit risk at the reporting date and measure the loss allowance for that financial
instrument at an amount equal to 12-month expected credit losses.For financial instrument at stage 1 stage 2 and those have low credit risk the interest revenue shall be calculated by applying the
effective interest rate to the gross carrying amount of a financial asset (ie impairment loss not been deducted). For financial
instrument at stage 3 interest revenue shall be calculated by applying the effective interest rate to the amortized cost after deducting
of impairment loss.
For notes receivable accounts receivable and accounts receivable financing no matter it contains a significant financing component
or not the Company shall measure the loss allowance at an amount equal to the lifetime expected credit losses.(a)Receivables/Contract Assets
For the notes receivable accounts receivable other receivables accounts receivable financing contract assets and long-term
receivables which are demonstrated to be impaired by any objective evidence or applicable for individual assessment the Company
shall individually assess for impairment and recognize the loss allowance for expected credit losses. If the Company determines that
no objective evidence of impairment exists for notes receivable accounts receivable other receivables accounts receivable financing
contract assets and long-term receivables or the expected credit loss of a single financial asset cannot be assessed at reasonable cost
such notes receivable accounts receivable other receivables accounts receivable financing contract assets and long-term receivables
shall be divided into several groups with similar credit risk characteristics and collectively calculated the expected credit loss. The
determination basis of groups is as following:
Determination basis of notes receivable is as following:
Illustration:
Group 1: Commercial acceptance bills
Group 2: Bank acceptance bills
For each group the Company calculates expected credit losses through default exposure and the lifetime expected credit losses rate
taking reference to historical experience for credit losses and considering current condition and expectation for the future economic
situation.
Determination basis of accounts receivable is as following:
Illustration:
Group 1: Portfolio grouped with ages
Group 2: Portfolio grouped with business of jewelry sales
For each group the Company calculates expected credit losses through preparing an aging analysis schedule with the lifetime
expected credit losses rate taking reference to historical experience for credit losses and considering current condition and
expectation for the future economic situation.Determination basis of other receivables is as following:
Illustration:
Group 1: Interest receivable
Group 2: Dividend receivable
Group 3: Portfolio grouped with ages
Group 4: Deposit and guarantee receivable
Group 5: Portfolio grouped with balances due from consolidated parties
For each group the Company calculates expected credit losses through default exposure and the 12-months or lifetime expected
credit losses rate taking reference to historical experience for credit losses and considering current condition and expectation for the
future economic situation.
Determination basis of long-term receivables financing is as following:
Illustration:
Group 1: Others
For group 1 the Company calculates expected credit losses through default exposure and the 12-months or lifetime expected credit
losses rate taking reference to historical experience for credit losses and considering current condition and expectation for the future
economic situation.(b) Debt investment and other debt investment
For debt investment and other debt investment the Company shall calculate the expected credit loss through the default exposure and
the 12-month or lifetime expected credit loss rate based on the nature of the investment counterparty and the type of risk exposure.(ii) Low credit risk
If the financial instrument has a low risk of default the borrower has a strong capacity to meet its contractual cash flow obligations in
the near term and adverse changes in economic and business conditions in the longer term may but will not necessarily reduce the
ability of the borrower to fulfill its contractual cash flow obligations.(iii) Significant increase in credit risk
The Company shall assess whether the credit risk on a financial instrument has increased significantly since initial recognition using
the change in the risk of a default occurring over the expected life of the financial instrument through the comparison of the risk of a
default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as
at the date of initial recognition.To make that assessment the Company shall consider reasonable and supportable information that is available without undue cost or
effort and that is indicative of significant increases in credit risk since initial recognition including forward-looking information.The information considered by the Company are as following:
? Significant changes in internal price indicators of credit risk as a result of a change in credit risk since inception
? Existing or forecast adverse change in the business financial or economic conditions of the borrower that results in a
significant change in the borrower’s ability to meet its debt obligations；
? An actual or expected significant change in the operating results of the borrower; An actual or expected significant
adverse change in the regulatory economic or technological environment of the borrower；
? Significant changes in the value of the collateral supporting the obligation or in the quality of third-party guarantees or
credit enhancements which are expected to reduce the borrower’s economic incentive to make scheduled contractual payments or to
otherwise have an effect on the probability of a default occurring;
? Significant change that are expected to reduce the borrower’ s economic incentive to make scheduled contractual
payments;
? Expected changes in the loan documentation including an expected breach of contract that may lead to covenant waivers
or amendments interest payment holidays interest rate step-ups requiring additional collateral or guarantees or other changes to the
contractual framework of the instrument；
? Significant changes in the expected performance and behaviour of the borrower；
? Contractual payments are more than 30 days past due.
Depending on the nature of the financial instruments the Company shall assess whether the credit risk has increased significantly
since initial recognition on an individual financial instrument or a group of financial instruments. When assessed based on a group of
financial instruments the Company can group financial instruments on the basis of shared credit risk characteristics for example
past due information and credit risk rating.Generally the Company shall determine the credit risk on a financial asset has increased significantly since initial recognition when
contractual payments are more than 30 days past due. The Company can only rebut this presumption if the Company has reasonable
and supportable information that is available without undue cost or effort that demonstrates that the credit risk has not increased
significantly since initial recognition even though the contractual payments are more than 30 days past due.(iv) Credit-impaired financial asset
The Company shall assess at each reporting date whether the credit impairment has occurred for financial asset at amortized cost and
debt investment at fair value through other comprehensive income. A financial asset is credit-impaired when one or more events that
have a detrimental impact on the estimated future cash flows of that financial asset have occurred. Evidences that a financial asset is
credit-impaired include observable data about the following events:
Significant financial difficulty of the issuer or the borrower；a breach of contract such as a default or past due event; the lender(s) of
the borrower for economic or contractual reasons relating to the borrower’s financial difficulty having granted to the borrower a
concession(s) that the lender(s) would not otherwise consider； it is becoming probable that the borrower will enter bankruptcy or
other financial reorganisation； the disappearance of an active market for that financial asset because of financial difficulties； the
purchase or origination of a financial asset at a deep discount that reflects the incurred credit losses.(v) Presentation of impairment of expected credit loss
In order to reflect the changes of credit risk of financial instrument since initial recognition the Company shall at each reporting date
remeasure the expected credit loss and recognize in profit or loss as an impairment gain or loss the amount of expected credit losses
addition(or reversal). For financial asset at amortized cost the loss allowance shall reduce the carrying amount of the financial asset
in the statement of financial position; for debt investment at fair value through other comprehensive income the loss allowance shall
be recognized in other comprehensive income and shall not reduce the carrying amount of the financial asset in the statement of
financial position.(vi) Write-off
The Company shall directly reduce the gross carrying amount of a financial asset when the Company has no reasonable expectations
of recovering the contractual cash flow of a financial asset in its entirety or a portion thereof. Such write-off constitutes a
derecognition of the financial asset. This circumstance usually occurs when the Company determines that the debtor has no assets or
sources of income that could generate sufficient cash flow to repay the write-off amount.Recovery of financial asset written off shall be recognized in profit or loss as reversal of impairment loss.(f) Transfer of financial assets
Transfer of financial assets refers to following two situations:
? Transfers the contractual rights to receive the cash flows of the financial asset;
? Transfers the entire or a part of a financial asset and retains the contractual rights to receive the cash flows of the financial
asset but assumes a contractual obligation to pay the cash flows to one or more recipients.(i) Derecognition of transferred assets
If the Company transfers substantially all the risks and rewards of ownership of the financial asset or neither transfers nor retains
substantially all the risks and rewards of ownership of the financial asset but has not retained control of the financial asset the
financial asset shall be derecognized.Whether the Company has retained control of the transferred asset depends on the transferee’ s ability to sell the asset. If the
transferee has the practical ability to sell the asset in its entirety to an unrelated third party and is able to exercise that ability
unilaterally and without needing to impose additional restrictions on the transfer the Company has not retained control.The Company judges whether the transfer of financial asset qualifies for derecognition based on the substance of the transfer.If the transfer of financial asset qualifies for derecognition in its entirety the difference between the following shall be recognized in
profit or loss:
? The carrying amount of transferred financial asset;
? The sum of consideration received and the part derecognized of the cumulative changes in fair value previously
recognized in other comprehensive income (The financial assets involved in the transfer are classified as financial assets at fair value
through other comprehensive income in accordance with Article 18 of the Accounting Standards for Business Enterprises -
Recognition and Measurement of Financial Instruments).If the transferred asset is a part of a larger financial asset and the part transferred qualifies for derecognition the previous carrying
amount of the larger financial asset shall be allocated between the part that continues to be recognized (For this purpose a retained
servicing asset shall be treated as a part that continues to be recognized) and the part that is derecognized based on the relative fair
values of those parts on the date of the transfer. The difference between following two amounts shall be recognized in profit or loss:
? The carrying amount (measured at the date of derecognition) allocated to the part derecognized；
? The sum of the consideration received for the part derecognized and part derecognized of the cumulative changes in fair
value previously recognized in other comprehensive income (The financial assets involved in the transfer are classified as financial
assets at fair value through other comprehensive income in accordance with Article 18 of the Accounting Standards for Business
Enterprises - Recognition and Measurement of Financial Instruments).
(ii) Continuing involvement in transferred assets
If the Company neither transfers nor retains substantially all the risks and rewards of ownership of a transferred asset and retains
control of the transferred asset the Company shall continue to recognize the transferred asset to the extent of its continuing
involvement and also recognize an associated liability.The extent of the Company’s continuing involvement in the transferred asset is the extent to which it is exposed to changes in the
value of the transferred asset
(iii) Continue to recognize the transferred assets
If the Company retains substantially all the risks and rewards of ownership of the transferred financial asset the Company shall
continue to recognize the transferred asset in its entirety and the consideration received shall be recognized as a financial liability.The financial asset and the associated financial liability shall not be offset. In subsequent accounting period the Company shall
continuously recognize any income (gain) arising from the transferred asset and any expense (loss) incurred on the associated
liability.(g) Offsetting financial assets and financial liabilities
Financial assets and financial liabilities shall be presented separately in the statement of financial position and shall not be offset.
When meets the following conditions financial assets and financial liabilities shall be offset and the net amount presented in the
statement of financial position:
The Company currently has a legally enforceable right to set off the recognized amounts; The Company intends either to settle on a
net basis or to realise the asset and settle the liability simultaneously.In accounting for a transfer of a financial asset that does not qualify for derecognition the Company shall not offset the transferred
asset and the associated liability.(h) Determination of fair value of financial instruments
Determination of financial assets and financial liabilities please refer to Note 3.11
3.11 Fair Value Measurement
Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.The Company determines fair value of the related assets and liabilities based on market value in the principal market or in the
absence of a principal market in the most advantageous market price for the related asset or liability. The fair value of an asset or a
liability is measured using the assumptions that market participants would use when pricing the asset or liability assuming that
market participants act in their economic best interest.The principal market is the market in which transactions for an asset or liability take place with the greatest volume and frequency.The most advantageous market is the market which maximizes the value that could be received from selling the asset and minimizes
the value which is needed to be paid in order to transfer a liability considering the effect of transport costs and transaction costs both.If the active market of the financial asset or financial liability exists the Company shall measure the fair value using the quoted price
in the active market. If the active market of the financial instrument is not available the Company shall measure the fair value using
valuation techniques.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by
using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best
use.? Valuation techniques
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value including the market approach the income approach and the cost approach. The Company shall use valuation
techniques consistent with one or more of those approaches to measure fair value. If multiple valuation techniques are used to
measure fair value the results shall be evaluated considering the reasonableness of the range of values indicated by those results. A
fair value measurement is the point within that range that is most representative of fair value in the circumstances.When using the valuation technique the Company shall give the priority to relevant observable inputs. The unobservable inputs can
only be used when relevant observable inputs is not available or practically would not be obtained. Observable inputs refer to the
information which is available from market and reflects the assumptions that market participants would use when pricing the asset or
liability. Unobservable Inputs refer to the information which is not available from market and it has to be developed using the best
information available in the circumstances from the assumptions that market participants would use when pricing the asset or
liability.
? Fair value hierarchy
To Company establishes a fair value hierarchy that categorises into three levels the inputs to valuation techniques used to measure
fair value. The fair value hierarchy gives the highest priority to Level 1 inputs and second to the Level 2 inputs and the lowest
priority to Level 3 inputs. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are
observable for the asset or liability either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability.
3.12 Inventories
(a) Classification of inventories
Investment property includes land use right of rent-out property and of property held for capital
appreciation and buildings that have been leased out.(b) Measurement method of cost of inventories sold or used
The cost of inventories used or sold is determined on the first in- first out or individual valuation
method basis.(c) Inventory system
The perpetual inventory system is adopted. The inventories should be counted at least once a year
and surplus or losses of inventory stocktaking shall be included in current profit and loss.(d) Provision for impairment of inventory
Inventories are stated at the lower of cost and net realizable value. The excess of cost over net realizable value of the inventories is
recognized as provision for impairment of inventory and recognized in current profit or loss.Net realizable value of the inventory should be determined on the basis of reliable evidence obtained and factors such as purpose of
holding the inventory and impact of post balance sheet event shall be considered.(i) In normal operation process finished goods products and materials for direct sale their net realizable values are determined at
estimated selling prices less estimated selling expenses and relevant taxes and surcharges; for inventories held to execute sales
contract or service contract their net realizable values are calculated on the basis of contract price. If the quantities of inventories
specified in sales contracts are less than the quantities held by the Company the net realizable value of the excess portion of
inventories shall be based on general selling prices. Net realizable value of materials held for sale shall be measured based on market
price.(ii) For materials in stock need to be processed in the ordinary course of production and business net realisable value is determined
at the estimated selling price less the estimated costs of completion the estimated selling expenses and relevant taxes. If the net
realisable value of the finished products produced by such materials is higher than the cost the materials shall be measured at cost; if
a decline in the price of materials indicates that the cost of the finished products exceeds its net realisable value the materials are
measured at net realisable value and differences shall be recognized at the provision for impairment.(iii) Provisions for inventory impairment are generally determined on an individual basis. For inventories with large quantity and low
unit price the provisions for inventory impairment are determined on a category basis.(iv) If any factor rendering write-downs of the inventories has been eliminated at the reporting date the amounts written down are
recovered and reversed to the extent of the inventory impairment which has been provided for. The reversal shall be included in
profit or loss.
3.13 Contract assets and Contract liabilities
Effective at 1st January 2020
The Company presents contract assets or contract liabilities in the balance sheet based on the relationship between its performance
obligations and customers’ payments. Contract assets and contract liabilities under the same contract shall offset each other and be
presented on a net basis.The Company presents an unconditional right to consideration (i.e. only the passage of time is required before the consideration is
due) as a receivable and presents a right to consideration in exchange for goods that it has transferred to a customer (which is
conditional on something other than the passage of time) as a contract asset.
For the Company's determination method and accounting treatment method for the expected credit loss of contract assets please refer
to Note 3.10 Financial Instruments for details.The Company presents an obligation to transfer goods to a customer for which the Company has received consideration (or the
amount is due) from the customer as a contract liability.
3.14 Contract costs
Effective at 1st January 2020
Assets related to contract costs including costs of obtaining a contract and costs to fulfil a contract.
The Company recognizes as an asset the incremental costs of obtaining a contract if those costs are expected to be recovered. The
costs of obtaining a contract shall be included into profit or loss when incurred if the amortization period of the asset is one year or
less.If the costs incurred in fulfilling a contract are not within the scope of standards related to inventories fixed assets or intangible
assets etc. the Company shall recognize the costs to fulfil a contract as an asset if all the following criteria are satisfied:
(i) The costs relate directly to a contract or to an anticipated contract including direct labor direct materials manufacturing overhead
cost (or similar cost) cost that are explicitly chargeable to the customer under the contract and other costs that are only related to the
contract;
(ii) The costs enhance resources of the Company that will be used in satisfying performance obligations in the future;
(iii) The costs are expected to be recovered.If the incremental cost incurred by the company to obtain the contract is expected to be recovered it shall be recognized as an
asset as the contract acquisition cost.The assets related to the contract cost shall be amortized on the same basis as the income from goods or services related to the
assets; however if the amortization period of the contract acquisition cost is less than one year the company shall include it in the
current profit and loss when it occurs.If the book value of the assets related to the contract cost is higher than the difference between the following two items the
company will make provision for impairment for the excess part and recognize it as the loss of asset impairment and further consider
whether the estimated liabilities related to the loss contract should be made:
(i) The residual consideration expected to be obtained due to the transfer of goods or services related to the asset;
(ii) The estimated cost to be incurred for the transfer of the relevant goods or services.If the above provision for impairment of assets is subsequently reversed the book value of the asset after reversal shall not
exceed the book value of the asset on the reversal date without provision for impairment.The contract performance cost recognized as an asset with an amortization period of no more than one year or one normal
business cycle at the time of initial recognition shall be listed in the "inventory" item and the amortization period of no more than
one year or one normal business cycle at the time of initial recognition shall be listed in the "other non-current assets" item.The contract acquisition cost recognized as an asset shall be listed in the item of "other current assets" when the amortization
period does not exceed one year or one normal business cycle at the time of initial recognition and listed in the item of "other non
current assets" when the amortization period exceeds one year or one normal business cycle at the time of initial recognition.
3.15 Non-current assets or disposal groups as held for sale
(a) Classification of non-current assets (or disposal groups) as held for
sale
The Company classifies a non-current asset (or disposal group) as held for sale if the following requirements are met simultaneously:
(i) The asset or disposal group must be available for immediate sale in its present condition subject only to the terms that are usual
and customary for sales of such assets (or disposal groups).(ii) Its sale must be highly probable i.e the Company must be committed to a plan to sell the asset (or disposal group) and obtain
definite purchase commitment and the sale is expected to complete within one year. If the relevant regulations require the approval
from the relevant power organisations or supervision departments of the Company before they can be sold the approval has been
obtained.When the Company acquires a non-current asset (or disposal group) exclusively with a view to its subsequent disposal it shall
classify the non-current asset (or disposal group) as held for sale at the acquisition date only if the one-year requirement is met and it
is highly probable that any other criteria that are not met at that date will be met within a short period following the acquisition
(usually within three months).The Company that is committed to dispose its equity investment in a subsidiary which will lead to its loss of control of the subsidiary
shall classify the investment as held for sale in the separate financial statements of the Company and classify all the assets and
liabilities of that subsidiary as held for sale in the consolidated financial statements of the group when the above criteria are met
regardless of whether the Company will remain part of equity investment in the subsidiary.(b) Measurement of non-current assets (or disposal groups) held for
sale
The principal of measurement of non-current assets (or disposal groups) held for sale does not apply to the following assets:
investment properties that are measured in accordance with the fair value model biological assets that are measured at fair value less
costs to sell assets arising from employee benefits deferred tax assets financial assets within the scope of relevant accounting
standards related to financial instruments and contractual rights under insurance contracts as defined in accounting standards related
to insurance contracts.When the non-current assets (or disposal groups) as held for sale are initially measured or subsequently measured at balance sheet
date if the carrying amount of the asset (or disposal group) is higher than the fair value less cost to sell it shall be written-down to its
fair value less cost to sell and the difference shall be recognized as impairment loss into current profit or loss and provision for asset
impairment shall be recognized simultaneously. At subsequent reporting date if there is any increase in fair value less costs to sell of
a non-current asset (or disposal group) the impairment loss recognized in previously shall be reversed to the extent of impairment
loss recognized after the asset has been classified as held-for-sale and included in profit or loss. An impairment loss recognized for
goodwill shall not be reversed in a subsequent period.When the assets (or disposal groups) ceases to be classified as held for sale or the non-current assets are removed from disposal
groups since the criteria for held for sale are no longer met the assets shall be measured at the lower of:
(i) Its carrying amount before the asset (or disposal group) was classified as held for sale adjusted for any depreciation amortization
or revaluations that would have been recognized had the asset (or disposal group) not been classified as held for sale and
(ii) Its recoverable amount
(c) Presentation
An entity shall present a non-current asset classified as held for sale and the assets of a disposal group classified as held for sale
separately from other assets in the statement of financial position. The liabilities of a disposal group classified as held for sale shall
be presented separately from other liabilities in the statement of financial position. Those assets and liabilities shall not be offset and
presented as a single amount.
3.16 Long-term Equity Investments
Long-term equity investments refer to equity investments where an investor has control of or
significant influence over an investee as well as equity investments in joint ventures. Associates of
the Company are those entities over which the Company has significant influence.(a) Determination basis of joint control or significant influence over
the investee
Joint control is the relevant agreed sharing of control over an arrangement and the arranged relevant activity must be decided under
unanimous consent of the parties sharing control. In assessing whether the Company has joint control of an arrangement the
Company shall assess first whether all the parties or a group of the parties control the arrangement. When all the parties or a group
of the parties considered collectively are able to direct the activities of the arrangement the parties control the arrangement
collectively. Then the Company shall assess whether decisions about the relevant activities require the unanimous consent of the
parties that collectively control the arrangement. If two or more groups of the parties could control the arrangement collectively it
shall not be assessed as have joint control of the arrangement. When assessing the joint control the protective rights are not
considered.Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or
joint control of those policies. In determination of significant influence over an investee the Company should consider not only the
existing voting rights directly or indirectly held but also the effect of potential voting rights held by the Company and other entities
that could be currently exercised or converted including the effect of share warrants share options and convertible corporate bonds
that issued by the investee and could be converted in current period.If the Company holds directly or indirectly 20% or more but less than 50% of the voting power of the investee it is presumed that
the Company has significant influence of the investee unless it can be clearly demonstrated that in such circumstance the Company
cannot participate in the decision-making in the production and operating of the investee.(b) Determination of initial investment cost
(i) Long-term equity investments generated in business combinations
For a business combination involving enterprises under common control if the Company makes payment in cash transfers non-cash
assets or bears liabilities as the consideration for the business combination the share of carrying amount of the owners’equity of the
acquiree in the consolidated financial statements of the ultimate controlling party is recognized as the initial cost of the long-term
equity investment on the combination date. The difference between the initial investment cost and the carrying amount of cash paid
non-cash assets transferred and liabilities assumed shall be adjusted against the capital reserve; if capital reserve is not enough to be
offset undistributed profit shall be offset in turn.
For a business combination involving enterprises under common control if the Company issues equity securities as the consideration
for the business combination the share of carrying amount of the owners’ equity of the acquiree in the consolidated financial
statements of the ultimate controlling party is recognized as the initial cost of the long-term equity investment on the combination
date. The total par value of the shares issued is recognized as the share capital. The difference between the initial investment cost and
the carrying amount of the total par value of the shares issued shall be adjusted against the capital reserve; if capital reserve is not
enough to be offset undistributed profit shall be offset in turn.
For business combination not under common control the assets paid liabilities incurred or assumed and the fair value of equity
securities issued to obtain the control of the acquiree at the acquisition date shall be determined as the cost of the business
combination and recognized as the initial cost of the long-term equity investment. The audit legal valuation and advisory fees other
intermediary fees and other relevant general administrative costs incurred for the business combination shall be recognized in profit
or loss as incurred.(ii) Long-term equity investments acquired not through the business combination the investment cost shall be determined based on
the following requirements:
For long-term equity investments acquired by payments in cash the initial cost is the actually paid purchase cost including the
expenses taxes and other necessary expenditures directly related to the acquisition of long-term equity investments.
For long-term equity investments acquired through issuance of equity securities the initial cost is the fair value of the issued equity
securities.
For the long-term equity investments obtained through exchange of non-monetary assets if the exchange has commercial substance
and the fair values of assets traded out and traded in can be measured reliably the initial cost of long-term equity investment traded in
with non-monetary assets are determined based on the fair values of the assets traded out together with relevant taxes. Difference
between fair value and book value of the assets traded out is recorded in current profit or loss. If the exchange of non-monetary assets
does not meet the above criterion the book value of the assets traded out and relevant taxes are recognized as the initial investment
cost.
For long-term equity investment acquired through debt restructuring the book value is determined based on the fair value of waived
debts and the taxes and other costs directly attributable to the assets. Difference between fair value and carrying amount of waived
debts shall be recorded in current profit or loss.(c) Subsequent measurement and recognition of profit or loss
Long-term equity investment to an entity over which the Company has ability of control shall be accounted for at cost method.Long-term equity investment to a joint venture or an associate shall be accounted for at equity method.(i) Cost method
For Long-term equity investment at cost method cost of the long-term equity investment shall be adjusted when additional amount is
invested or a part of it is withdrawn. The Company recognizes its share of cash dividends or profits which have been declared to
distribute by the investee as current investment income.(ii) Equity method
If the initial cost of the investment is in excess of the share of the fair value of the net identifiable assets in the investee at the date of
investment the difference shall not be adjusted to the initial cost of long-term equity investment; if the initial cost of the investment
is in short of the share of the fair value of the net identifiable assets in the investee at the date investment the difference shall be
included in the current profit or loss and the initial cost of the long-term equity investment shall be adjusted accordingly.The Company recognizes the share of the investee’s net profits or losses as well as its share of the investee’s other comprehensive
income as investment income or losses and other comprehensive income respectively and adjusts the carrying amount of the
investment accordingly. The carrying amount of the investment shall be reduced by the share of any profit or cash dividends declared
to distribute by the investee. The investor’s share of the investee’s owners’ equity changes other than those arising from the
investee’s net profit or loss other comprehensive income or profit distribution shall be recognized in the investor’s equity and the
carrying amount of the long-term equity investment shall be adjusted accordingly. The Company recognizes its share of the investee’
s net profits or losses after making appropriate adjustments of investee’ s net profit based on the fair values of the investee’ s
identifiable net assets at the investment date. If the accounting policy and accounting period adopted by the investee is not in
consistency with the Company the financial statements of the investee shall be adjusted according to the Company’s accounting
policies and accounting period based on which investment income or loss and other comprehensive income etc. shall be adjusted.The unrealized profits or losses resulting from inter-Company transactions between the Company and its associate or joint venture
are eliminated in proportion to the Company’s equity interest in the investee based on which investment income or losses shall be
recognized. Any losses resulting from inter-Company transactions between the investor and the investee which belong to asset
impairment shall be recognized in full.Where the Company obtains the power of joint control or significant influence but not control over the investee due to additional
investment or other reason the relevant long-term equity investment shall be accounted for by using the equity method initial cost of
which shall be the fair value of the original investment plus the additional investment. Where the original investment is classified as
available-for sale investment difference between its fair value and the carrying value in addition to the cumulative changes in fair
value previously recorded in other comprehensive income shall be recogised into current profit or loss using equity method.If the Company loses the joint control or significant influence of the investee for some reasons such as disposal of equity investment
the retained interest shall be measured at fair value and the difference between the carrying amount and the fair value at the date of
loss the joint control or significant influence shall be recognized in profit or loss. When the Company discontinues the use of the
equity method the Company shall account for all amounts previously recognized in other comprehensive income under equity
method in relation to that investment on the same basis as would have been required if the investee had directly disposed of the
related assets or liabilities.(d) Equity investment classified as held for sale
For an equity investment or a portion of an equity investment in an associate or a joint venture is classified as held for sale the
relevant accounting treatment please refer to Note 3.14.
Any retained interest in the equity investment not classified as held for sale shall be accounted for using equity method.
When an equity investment in an associate or a joint venture previously classified as held for sale no longer meets the criteria to be so
classified it shall be accounted for using the equity method retrospectively as from the date of its classification as held for sale.
Financial statements for the periods since classification as held for sale shall be amended accordingly.
(e) Impairment testing and provision for impairment loss
For investment in subsidiaries associates or a joint ventures provision for impairment loss please refer to Note 3.22.
3.17 Investment Properties
(a) Classification of investment properties
Investment properties are properties to earn rentals or for capital appreciation or both including:
(i)Land use right leased out
(ii)Land held for transfer upon appreciation
(iii)Buildings leased out
(b) The measurement model of investment property
The Company adopts the cost model for subsequent measurement of investment properties. For
provision for impairment please refer to Note 3.23.The Company calculates the depreciation or amortization based on the net amount of investment
property cost less the accumulated impairment and the net residual value using straight-line method.The estimated useful life and annual depreciation rates which are determined according to the
categories estimated economic useful lives and estimated net residual rates are listed as followings:
Category
Estimated useful
life (year)
Residualrates (%)
Annual depreciation rates
(%)
Buildingsandconstructions 35-40 3 2.77-2.43
Land use right 50 — 2.00
3.18 Fixed Assets
Fixed assets refer to the tangible assets with higher unit price held for the purpose of producing
commodities rendering services renting or business management with useful lives exceeding one
year.(a) Recognition criteria of fixed assets
Fixed assets will only be recognized at the actual cost paid when obtaining as all the following
criteria are satisfied:
(i) It is probable that the economic benefits relating to the fixed assets will flow into the Company;
(ii) The costs of the fixed assets can be measured reliably.Subsequent expenditure for fixed assets shall be recorded in cost of fixed assets if recognition
criteria of fixed assets are satisfied otherwise the expenditure shall be recorded in current profit or
loss when incurred.(b) Depreciation methods of fixed assets
The Company begins to depreciate the fixed asset from the next month after it is available for intended use using the
straight-line-method. The estimated useful life and annual depreciation rates which are determined according to the categories
estimated economic useful lives and estimated net residual rates of fixed assets are listed as followings:
Categories Depreciation method
Useful life
(years)
Estimated
residual value
proportion (%)
Annual
depreciation rate
(%)
Buildings and
structures
Straight-line method 1035-40 0、3 2.43-2.7710.00
Decoration fees for
self-owned houses
Straight-line method 10 0 10.00
Machinery Straight-line method 12 3 8.08
Transport facilities Straight-line method 7 3 13.86
Electronic equipment Straight-line method 5-7 3 13.86-19.40
Office and other
equipment
Straight-line method 7 3 13.86
For the fixed assets with impairment provided the impairment provision should be excluded from the cost when calculating
depreciation.
At the end of reporting period the Company shall review the useful life estimated net residual value and depreciation method of the
fixed assets. Estimated useful life of the fixed assets shall be adjusted if it is changed compared to the original estimation.(c) Recognition criteria valuation and depreciation methods of fixed assets obtained through
a finance lease
If the entire risk and rewards related to the leased assets have been substantially transferred the
Company shall recognize the lease as a finance lease. The cost of the fixed assets obtained through
a finance lease is determined at the lower of the fair value of the leased assets and the present value
of the minimum lease payment on the date of the lease. The fixed assets obtained by a finance lease
are depreciated in the method which is consistent with the self-owned fixed assets of the Company.
For fixed assets obtained through a finance lease if it is reasonably certain that the ownership of the
leased assets will be transferred to the lessee by the end of the lease term they shall be depreciated
over their remaining useful lives; otherwise the leased assets shall be depreciated over the shorter
of the lease terms or their remaining useful lives.
3.19 Construction in Progress
(a) Classification of construction in progress
Construction in progress is measured on an individual project basis.
(b) Recognition criteria and timing of transfer from construction in
progress to fixed assets
The initial book values of the fixed assets are stated at total expenditures incurred before they are
ready for their intended use including construction costs original price of machinery equipment
other necessary expenses incurred to bring the construction in progress to get ready for its intended
use and borrowing costs of the specific loan for the construction or the proportion of the general
loan used for the constructions incurred before they are ready for their intended use. The
construction in progress shall be transferred to fixed asset when the installation or construction is
ready for the intended use. For construction in progress that has been ready for their intended use
but relevant budgets for the completion of projects have not been completed the estimated values of
project budgets prices or actual costs should be included in the costs of relevant fixed assets and
depreciation should be provided according to relevant policies of the Company when the fixed
assets are ready for intended use. After the completion of budgets needed for the completion of
projects the estimated values should be substituted by actual costs but depreciation already
provided is not adjusted.
3.20 Borrowing Costs
(a) Recognition criteria and period for capitalization of borrowing
costs
The Company shall capitalize the borrowing costs that are directly attributable to the acquisition
construction or production of qualifying assets when meet the following conditions:
(i) Expenditures for the asset are being incurred;
(ii) Borrowing costs are being incurred and;
(iii) Acquisition construction or production activities that are necessary to prepare the assets for
their intended use or sale are in progress.Other borrowing cost discounts or premiums on borrowings and exchange differences on foreign
currency borrowings shall be recognized into current profit or loss when incurred.
Capitalization of borrowing costs is suspended during periods in which the acquisition construction
or production of a qualifying asset is interrupted abnormally and the interruption is for a continuous
period of more than 3 months.
Capitalization of such borrowing costs ceases when the qualifying assets being acquired
constructed or produced become ready for their intended use or sale. The expenditure incurred
subsequently shall be recognized as expenses when incurred.(b) Capitalization rate and measurement of capitalized amounts of
borrowing costs
When funds are borrowed specifically for purchase construction or manufacturing of assets eligible
for capitalization the Company shall determine the amount of borrowing costs eligible for
capitalisation as the actual borrowing costs incurred on that borrowing during the period less any
interest income on bank deposit or investment income on the temporary investment of those
borrowings.Where funds allocated for purchase construction or manufacturing of assets eligible for
capitalization are part of a general borrowing the eligible amounts are determined by the
weighted-average of the cumulative capital expenditures in excess of the specific borrowing
multiplied by the general borrowing capitalization rate. The capitalization rate will be the weighted
average of the borrowing costs applicable to the general borrowing.
3.21 Intangible Assets
(a) Measurement method of intangible assets
Intangible assets are recognized at actual cost at acquisition.(b) The useful life and amortization of intangible assets
(i) The estimated useful lives of the intangible assets with finite useful lives are as follows:
Category Estimated useful life Basis
Land use right 50 years Legal life
Software 5 years
The service life is determined by
reference to the period that can bring
economic benefits to the Company
Royalties 10 years
The service life is determined by
reference to the period that can bring
economic benefits to the Company
For intangible assets with finite useful life the estimated useful life and amortization method are
reviewed annually at the end of each reporting period and adjusted when necessary. No change
incurs in current year in the estimated useful life and amortization method upon review.(ii) Assets of which the period to bring economic benefits to the Company are unforeseeable are
regarded as intangible assets with indefinite useful lives. The Company reassesses the useful lives
of those assets at every year end. If the useful lives of those assets are still indefinite impairment
test should be performed on those assets at the balance sheet date.(iii) Amortization of the intangible assets
For intangible assets with finite useful lives their useful lives should be determined upon their
acquisition and systematically amortized on a straight-line basis [units of production method] over
the useful life. The amortization amount shall be recognized into current profit or loss according to
the beneficial items. The amount to be amortized is cost deducting residual value. For intangible
assets which has impaired the cumulative impairment provision shall be deducted as well. The
residual value of an intangible asset with a finite useful life shall be assumed to be zero unless: there
is a commitment by a third party to purchase the asset at the end of its useful life; or there is an
active market for the asset and residual value can be determined by reference to that market; and it
is probable that such a market will exist at the end of the asset’s useful life.Intangible assets with indefinite useful lives shall not be amortized. The Company reassesses the
useful lives of those assets at every year end. If there is evidence to indicate that the useful lives of
those assets become finite the useful lives shall be estimated and the intangible assets shall be
amortized systematically and reasonably within the estimated useful lives.
3.22 Impairment of Long-TermAssets
Impairment loss of long-term equity investment in subsidiaries associates and joint ventures
investment properties fixed assets and constructions in progress subsequently measured at cost
productive biological assets intangible assets goodwill the rights and interests of proved mining
areas of petroleum and natural gas and wells and other relevant facilities measured at cost
(excluding inventories investment properties measured at fair value deferred tax assets financial
assets) shall be determined according to following method:
The Company shall assess at the end of each reporting period whether there is any indication that an
asset may be impaired. If any such indication exists the Company shall estimate the recoverable
amount of the asset and test for impairment. Irrespective of whether there is any indication of
impairment the Company shall test for impairment of goodwill acquired in a business combination
intangible assets with an indefinite useful life or intangible assets not yet available for use annually.The recoverable amounts of the long-term assets are the higher of their fair values less costs to
dispose and the present values of the estimated future cash flows of the long-term assets. The
Company estimate the recoverable amounts on an individual basis. If it is difficult to estimate the
recoverable amount of the individual asset the Company estimates the recoverable amount of the
groups of assets that the individual asset belongs to. Identification of an group of asset is based on
whether the cash inflows from it are largely independent of the cash inflows from other assets or
groups of assets.If and only if the recoverable amount of an asset or a group of assets is less than its carrying
amount the carrying amount of the asset shall be reduced to its recoverable amount and the
provision for impairment loss shall be recognized accordingly.
For the purpose of impairment testing goodwill acquired in a business combination shall from the
acquisition date be allocated to relevant group of assets based on reasonable method; if it is
difficult to allocate to relevant group of assets good will shall be allocated to relevant combination
of asset groups. The relevant group of assets or combination of asset groups is a group of assets or
combination of asset groups that is benefit from the synergies of the business combination and is
not larger than the reporting segment determined by the Company.When test for impairment if there is an indication that relevant group of assets or combination of
asset groups may be impaired impairment testing for group of assets or combination of asset groups
excluding goodwill shall be conducted first and calculate the recoverable amount and recognize the
impairment loss. Then the group of assets or combination of asset groups including goodwill shall
be tested for impairment by comparing the carrying amount with its recoverable amount. If the
recoverable amount is less than the carrying amount the Company shall recognize the impairment
loss.The mentioned impairment loss will not be reversed in subsequent accounting period once it had
been recognized.
3.23 Long-term Deferred Expenses
Long-term deferred expenses are various expenses already incurred which shall be amortized over current and subsequent periods
with the amortization period exceeding one year.Long-term deferred expenses are evenly amortized within its beneficiary period or stipulated period.
3.24 Employee Benefits
Employee benefits refer to all forms of consideration or compensation given by the Company in
exchange for service rendered by employees or for the termination of employment relationship.
Employee benefits include short-term employee benefits post-employment benefits termination
benefits and other long-term employee benefits. Benefits provided to an employee's spouse
children dependents family members of decreased employees or other beneficiaries are also
employee benefits.
According to liquidity employee benefits are presented in the statement of financial position as
“Employee benefits payable” and “Long-term employee benefits payable”.
(a) Short-term employee benefits
(i) Employee basic salary (salary bonus allowance subsidy)
The Company recognizes in the accounting period in which an employee provides service actually occurred short-term employee
benefits as a liability with a corresponding charge to current profit except for those recognized as capital expenditure based on the
requirement of accounting standards.(ii) Employee welfare
The Company shall recognize the employee welfare based on actual amount when incurred into current profit or loss or related
capital expenditure. Employee welfare shall be measured at fair value as it is a non-monetary benefits.(iii) Social insurance such as medical insurance work injury insurance and maternity insurance housing funds labor union fund and
employee education fund
Payments made by the Company of social insurance for employees such as medical insurance
work injury insurance and maternity insurance payments of housing funds and labor union fund
and employee education fund accrued in accordance with relevant requirements in the accounting
period in which employees provide services is calculated according to required accrual bases and
accrual ratio in determining the amount of employee benefits and the related liabilities which shall
be recognized in current profit or loss or the cost of relevant asset.(iv) Short-term paid absences
The Company shall recognize the related employee benefits arising from accumulating paid
absences when the employees render service that increases their entitlement to future paid absences.The additional payable amounts shall be measured at the expected additional payments as a result of
the unused entitlement that has accumulated. The Company shall recognize relevant employee
benefit of non-accumulating paid absences when the absences actually occurred.(v)Short-term
profit-sharing plan
The Company shall recognize the related employee benefits payable under a profit-sharing plan
when all of the following conditions are satisfied:
(i) The Company has a present legal or constructive obligation to make such payments as a result of past events; and
(ii) A reliable estimate of the amounts of employee benefits obligation arising from the profit- sharing plan can be made.(b) Post-employment benefits
(i) Defined contribution plans
The Company shall recognize in the accounting period in which an employee provides service the contribution payable to a defined
contribution plan as a liability with a corresponding charge to the current profit or loss or the cost of a relevant asset.When contributions to a defined contribution plan are not expected to be settled wholly before twelve months after the end of the
annual reporting period in which the employees render the related service they shall be discounted using relevant discount rate
(market yields at the end of the reporting period on high quality corporate bonds in active market or government bonds with the
currency and term which shall be consistent with the currency and estimated term of the defined contribution obligations) to measure
employee benefits payable.(ii) Defined benefit plan
A.The present value of defined benefit obligation and current service costs
Based on the expected accumulative welfare unit method the Company shall make estimates about demographic variables and
financial variables in adopting the unbiased and consistent actuarial assumptions and measure defined benefit obligation and
determine the obligation period. The Company shall discount the obligation arising from defined benefit plan using relevant discount
rate (market yields at the end of the reporting period on high quality corporate bonds in active market or government bonds with the
currency and term which shall be consistent with the currency and estimated term of the defined benefit obligations) in order to
determine the present value of the defined benefit obligation and the current service cost.
B.The net defined benefit liability or asset
The net defined benefit liability (asset) is the deficit or surplus recognized as the present value of the defined benefit obligation less
the fair value of plan assets (if any).When the Company has a surplus in a defined benefit plan it shall measure the net defined benefit asset at the lower of the surplus in
the defined benefit plan and the asset ceiling.
C.The amount recognized in the cost of asset or current profit or loss
Service cost comprises current service cost past service cost and any gain or loss on settlement. Other service cost shall be
recognized in profit or loss unless accounting standards require or allow the inclusion of current service cost within the cost of assets.Net interest on the net defined benefit liability (asset) comprising interest income on plan assets interest cost on the defined benefit
obligation and interest on the effect of the asset ceiling shall be included in profit or loss.
D.The amount recognized in other comprehensive income
Changes in the net liability or asset of the defined benefit plan resulting from the remeasurements including:
? Actuarial gains and losses the changes in the present value of the defined benefit obligation resulting from experience
adjustments or the effects of changes in actuarial assumptions;
? Return on plan assets excluding amounts included in net interest on the net defined benefit liability or asset;
? Any change in the effect of the asset ceiling excluding amounts included in net interest on the net defined benefit liability
(asset).Remeasurements of the net defined benefit liability (asset) recognized in other comprehensive income shall not be reclassified to
profit or loss in a subsequent period. However the Company may transfer those amounts recognized in other comprehensive income
within equity.(c) Termination benefits
The Company providing termination benefits to employees shall recognize an employee benefits liability for termination benefits
with a corresponding charge to the profit or loss of the reporting period at the earlier of the following dates:
(i) When the Company cannot unilaterally withdraw the offer of termination benefits because of an employment termination plan
or a curtailment proposal.(ii) When the Company recognizes costs or expenses related to a restructuring that involves the payment of termination benefits.If the termination benefits are not expected to be settled wholly before twelve months after the end of the annual reporting period the
Company shall discount the termination benefits using relevant discount rate (market yields at the end of the reporting period on high
quality corporate bonds in active market or government bonds with the currency and term which shall be consistent with the currency
and estimated term of the defined benefit obligations) to measure the employee benefits.(d) Other long-term employee benefits
(i) Meet the conditions of the defined contribution plan
When other long-term employee benefits provided by the Company to the employees satisfies the conditions for classifying as a
defined contribution plan all those benefits payable shall be accounted for as employee benefits payable at their discounted value.(ii) Meet the conditions of the defined benefit plan
At the end of the reporting period the Company recognized the cost of employee benefit from other long-term employee benefits as
the following components:
? Service costs;
? Net interest cost for net liability or asset of other long-term employee benefits
? Changes resulting from the remeasurements of the net liability or asset of other long-term employee benefits
In order to simplify the accounting treatment the net amount of above items shall be recognized in profit or loss or relevant cost of
assets.
3.25 Estimated Liabilities
(a) Recognition criteria of estimated liabilities
The Company recognizes the estimated liabilities when obligations related to contingencies satisfy all the following conditions:
(i) That obligation is a current obligation of the Company;
(ii) It is likely to cause any economic benefit to flow out of the Company as a result of performance of the obligation; and
(iii) The amount of the obligation can be measured reliably.(b) Measurement method of estimated liabilities
The estimated liabilities of the Company are initially measured at the best estimate of expenses required for the performance of
relevant present obligations. The Company when determining the best estimate has had a comprehensive consideration of risks with
respect to contingencies uncertainties and the time value of money. The carrying amount of the estimated liabilities shall be reviewed
at the end of every reporting period. If conclusive evidences indicate that the carrying amount fails to be the best estimate of the
estimated liabilities the carrying amount shall be adjusted based on the updated best estimate.
3.26 Revenue
Effective at 1st January 2020
(a)Revenue recognition principles
At contract inception the Company shall assess the contracts and shall identify each performance
obligation in the contracts and determine whether the performance obligation should be satisfied
over time or at a point in time.The Company satisfies a performance obligation over time if one of the following criteria is met
otherwise the performance obligation is satisfied at a point in time:
(1) the customer simultaneously receives and consumes the economic benefits provided by the
Company’s performance as the Company performs;
(2) the customer can control goods as they are created by the Company’s performance;
(3) goods created during the Company’s performance have irreplaceable uses and the Company
has an enforceable right to receive the payments for performance completed to date during the
whole contract period.
For each performance obligation satisfied over time the Company shall recognize revenue over
time by measuring the progress towards complete satisfaction of that performance obligation. In the
circumstance that the progress cannot be measured reasonably but the costs incurred in satisfying
the performance obligation are expected to be recovered the Company shall recognize revenue only
to the extent of the costs incurred until it can reasonably measure the progress. For each
performance obligation satisfied at a point in time the Company shall recognize revenue at the time
point that the client obtains control of relevant goods or services. To determine whether the
customer has obtained control of goods the Company shall consider the following indications:
(1) the Company has a present right to payment for the goods i.e. the customer is presently obliged
to pay for the goods;
(2) the Company has transferred the legal title of the goods to the customer i.e. the customer has
legal title to the goods;
(3) the Company has transferred physical possession of the goods to the client i.e. the customer has
physically possessed the goods;
(4) the Company has transferred significant risks and rewards of ownership of the goods to the
client i.e. the customer has obtained significant risks and rewards of ownership of the goods;
(5) the customer has accepted the goods;
(6) other evidence indicating the customer has obtained control over the goods.
Sales return clause
For the sales with return clauses when the customer obtains the control right of the relevant goods
the company shall recognize the revenue according to the amount of consideration it is entitled to
obtain due to the transfer of the goods to the customer and recognize the amount expected to be
returned due to the sales return as the estimated liability; at the same time the company shall deduct
the estimated cost of recovering the goods according to the book value of the expected returned
goods at the time of transfer. The balance after deducting the value of the returned goods is
recognized as an asset that is the cost of return receivable which is carried forward by deducting
the net cost of the above assets according to the book value of the transferred goods at the time of
transfer. On each balance sheet date the Company re estimates the return of future sales and re
measures the above assets and liabilities.Warranty obligations
According to the contract and legal provisions the company provides quality assurance for the
goods sold and the projects constructed. For the guarantee quality assurance to ensure that the goods
sold meet the established standards the company conducts accounting treatment in accordance with
the “Accounting Standards for Business Enterprises No. 13 – Contingencies”. For the service
quality assurance which provides a separate service in addition to guaranteeing that the goods sold
meet the established standards the company takes it as a single performance obligation allocates
part of the transaction price to the service quality assurance according to the relative proportion of
the separate selling price of the goods and service quality assurance and recognizes the revenue
when the customer obtains the service control right. When evaluating whether the quality assurance
provides a separate service in addition to assuring customers that the goods sold meet the
established standards the company considers whether the quality assurance is a statutory
requirement the quality assurance period and the nature of the company's commitment to perform
the task.Principal responsible person and agent
The company has the right to determine the price of the traded goods after obtaining the control
right of the trading goods from the third party and then transferring it to the customer that is the
company can control the goods before transferring the trading goods to the customer. Therefore the
company is the main responsible person and recognizes the income according to the total
consideration received or receivable. Otherwise the company as the agent shall recognize the
income according to the amount of commission or service charge that it is expected to be entitled to
receive which shall be determined according to the net amount of the total consideration received
or receivable after deducting the price payable to other relevant parties or according to the
established Commission amount or proportion.
Customer consideration payable
If there is consideration payable to the customer in the contract unless the consideration is to obtain
other clearly distinguishable goods or services from the customer the company will offset the
transaction price with the consideration payable and offset the current income at the later time of
confirming the relevant income or paying (or promising to pay) the customer's consideration.
Contractual rights not exercised by customers
If the company advances sales of goods or services to customers the amount shall be recognized as
liabilities first and then converted into income when relevant performance obligations are fulfilled.When the company does not need to return the advance payment and the customer may give up all
or part of the contract rights if the company expects to have the right to obtain the amount related
to the contract rights given up by the customer the above amount shall be recognized as income in
proportion according to the mode of the customer exercising the contract rights; otherwise the
company only has the very low possibility of the customer requiring to perform the remaining
performance obligations The relevant balance of the above liabilities is converted into income.(b) Revenue recognition method adopted by the Company
(i) Goods sales contract
The sales contract between the company and the customer includes the performance obligation of transferring the goods which
belongs to the performance obligation at a certain time point.The recognition of automobile sales revenue and jewelry wholesale revenue shall meet the following conditions: the company has
delivered the goods to the customer according to the contract the customer has accepted the goods the payment for goods has been
collected or the receipt has been obtained and the relevant economic benefits are likely to flow in the main risks and rewards of the
ownership of the goods have been transferred and the legal ownership of the goods has been transferred.(ii) Auto maintenance and testing contract
The performance obligations included in the automobile maintenance and testing contract between the company and its customers
belong to the performance obligations at a certain time point.The following conditions shall be met for the recognition of automobile maintenance and testing Revenue: the company has
completed automobile maintenance and testing services according to the contract settled all materials and working hours expenses
with customers and allowed customers' vehicles to leave the company's maintenance plant.(iii) Service contract
The service contract between the company and the customer includes the performance obligation of the service related to the rental
real estate. As the company's performance at the same time the customer obtains and consumes the economic benefits brought by the
company's performance the company takes it as the performance obligation within a certain period of time and allocates it equally
during the service provision period.(iv) Real estate lease contract
Please refer to Note 3.29 LEASES for the revenue recognition method for real estate lease contract.
3.27 Government Grants
(a) Recognition of government grants
A government grant shall not be recgonised until there is reasonable assurance that:
(i) The Company will comply with the conditions attaching to them; and
(ii) The grants will be received.(b) Measurement of government grants
Monetary grants from the government shall be measured at amount received or receivable and non-monetary grants from the
government shall be measured at their fair value or at a nominal value of CNY 1.00 when reliable fair value is not available.(c) Accounting for government grants
(i) Government grants related to assets
Government grants pertinent to assets mean the government grants that are obtained by the Company used for purchase or
construction or forming the long-term assets by other ways. Government grants pertinent to assets shall be recognized as deferred
income and should be recognized in profit or loss on a systematic basis over the useful lives of the relevant assets. Grants measured
at their nominal value shall be directly recognized in profit or loss of the period when the grants are received. When the relevant
assets are sold transferred written off or damaged before the assets are terminated the remaining deferred income shall be
transferred into profit or loss of the period of disposing relevant assets.(ii) Government grants related to income
Government grants other than related to assets are classified as government grants related to income. Government grants related to
income are accounted for in accordance with the following principles:
If the government grants related to income are used to compensate the enterprise’s relevant expenses or losses in future periods such
government grants shall be recognized as deferred income and included into profit or loss (or write down related expenses) in the
same period as the relevant expenses or losses are recognized;
If the government grants related to income are used to compensate the enterprise’ s relevant expenses or losses incurred such
government grants are directly recognized into current profit or loss (or write down related expenses).
For government grants comprised of part related to assets as well as part related to income each part is accounted for separately; if it
is difficult to identify different part the government grants are accounted for as government grants related to income as a whole.Government grants related to daily operation activities are recognized in other income (or write down related expenses) in
accordance with the nature of the activities and government grants irrelevant to daily operation activities are recognized in
non-operating income.(iii) Repayment of the government grants
Repayment of the government grants shall be recorded by increasing the carrying amount of the asset if the book value of the asset
has been written down or reducing the balance of relevant deferred income if deferred income balance exists any excess will be
recognized into current profit or loss; or directly recognized into current profit or loss for other circumstances.
3.28 Deferred Tax Assets and Deferred Tax Liabilities
Temporary differences are differences between the carrying amount of an asset or liability in the
statement of financial position and its tax base at the balance sheet date. The Company recognize
and measure the effect of taxable temporary differences and deductible temporary differences on
income tax as deferred tax liabilities or deferred tax assets using liability method. Deferred tax
assets and deferred tax liabilities shall not be discounted.(a) Recognition of deferred tax assets
Deferred tax assets should be recognized for deductible temporary differences the carryforward of unused tax losses and the
carryforward of unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences the carryforward of unused tax losses and the carryforward of unused tax credits can be utilised at the tax rates
that are expected to apply to the period when the asset is realised unless the deferred tax asset arises from the initial recognition of an
asset or liability in a transaction that:
(i) Is not a business combination; and
(ii) At the time of the transaction affects neither accounting profit nor taxable profit (tax loss)
The Company shall recognize a deferred tax asset for all deductible temporary differences arising from investments in subsidiaries
associates and joint ventures only to the extent that it is probable that:
(i) The temporary difference will reverse in the foreseeable future; and
(ii) Taxable profit will be available against which the deductible temporary difference can be utilised.
At the end of each reporting period if there is sufficient evidence that it is probable that taxable profit will be available against which
the deductible temporary difference can be utilized the Company recognizes a previously unrecognized deferred tax asset.The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting period. The Company shall reduce the
carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient taxable profit will be available to
allow the benefit of part or all of that deferred tax asset to be utilised. Any such reduction shall be reversed to the extent that it
becomes probable that sufficient taxable profit will be available.(b) Recognition of deferred tax liabilities
A deferred tax liability shall be recognized for all taxable temporary differences at the tax rate that are expected to apply to the period
when the liability is settled.(i) No deferred tax liability shall be recognized for taxable temporary differences arising from:
? The initial recognition of goodwill; or
? The initial recognition of an asset or liability in a transaction which: is not a business combination; and at the time of the
transaction affects neither accounting profit nor taxable profit (tax loss)
(ii) An entity shall recognize a deferred tax liability for all taxable temporary differences associated with investments in subsidiaries
associates and joint ventures except to the extent that both of the following conditions are satisfied:
? The Company is able to control the timing of the reversal of the temporary difference; and
? It is probable that the temporary difference will not reverse in the foreseeable future.(c) Recognition of deferred tax liabilities or assets involved in special
transactions or events
(i) Deferred tax liabilities or assets related to business combination
For the taxable temporary difference or deductible temporary difference arising from a business combination not under common
control a deferred tax liability or a deferred tax asset shall be recognized and simultaneously goodwill recognized in the business
combination shall be adjusted based on relevant deferred tax expense (income).(ii) Items directly recognized in equity
Current tax and deferred tax related to items that are recognized directly in equity shall be recognized in equity. Such items include:
other comprehensive income generated from fair value fluctuation of available for sale investments; an adjustment to the opening
balance of retained earnings resulting from either a change in accounting policy that is applied retrospectively or the correction of a
prior period (significant) error; amounts arising on initial recognition of the equity component of a compound financial instrument
that contains both liability and equity component.(iii) Unused tax losses and unused tax credits
A.Unsused tax losses and unused tax credits generated from daily operation of the Company itself
Deductible loss refers to the loss calculated and permitted according to the requirement of tax law that can be offset against taxable
income in future periods. The criteria for recognising deferred tax assets arising from the carryforward of unused tax losses and tax
credits are the same as the criteria for recognising deferred tax assets arising from deductible temporary differences. The Company
recognizes a deferred tax asset arising from unused tax losses or tax credits only to the extent that there is convincing other evidence
that sufficient taxable profit will be available against which the unused tax losses or unused tax credits can be utilised by the
Company. Income taxes in current profit or loss shall be deducted as well.
B.Unsused tax losses and unused tax credits arising from a business combination
Under a business combination the acquiree’s deductible temporary differences which do not satisfy the criteria at the acquisition
date for recognition of deferred tax asset shall not be recognized. Within 12 months after the acquisition date if new information
regarding the facts and circumstances exists at the acquisition date and the economic benefit of the acquiree’s deductible temporary
differences at the acquisition is expected to be realised the Company shall recognize acquired deferred tax benefits and reduce the
carrying amount of any goodwill related to this acquisition. If goodwill is reduced to zero any remaining deferred tax benefits shall
be recognized in profit or loss. All other acquired deferred tax benefits realised shall be recognized in profit or loss.(iv) Temporary difference generated in consolidation elimination
When preparing consolidated financial statements if temporary difference between carrying value of the assets and liabilities in the
consolidated financial statements and their taxable bases is generated from elimination of inter-Company unrealized profit or loss
deferred tax assets or deferred tax liabilities shall be recognized in the consolidated financial statements and income taxes expense in
current profit or loss shall be adjusted as well except for deferred tax related to transactions or events recognized directly in equity
and business combination.(v) Share-based payment settled by equity
If tax authority permits tax deduction that relates to share-based payment during the period in which the expenses are recognized
according to the accounting standards the Company estimates the tax base in accordance with available information at the end of the
accounting period and the temporary difference arising from it. Deferred tax shall be recognized when criteria of recognition are
satisfied. If the amount of estimated future tax deduction exceeds the amount of the cumulative expenses related to share-based
payment recognized according to the accounting standards the tax effect of the excess amount shall be recognized directly in equity.
3.29 Leases
The Company classifies the lease that substantially transfers all the risks and rewards incidental to ownership of an underlying asset
as a finance lease. Other lease shall be classified as an operating lease.(a) Accounting for operating leases
(i) When the Company as a lessee the lease payments should be recognized into profit or loss of the
reporting period over the lease terms on a straight-line basis or the amount of usage. If the lessor
provides the rent-free period the Company shall allocate total lease payment over the entire lease
terms including the rent-free period using straight-line basis or other reasonable method. Lease
expense and the corresponding liabilities shall be recognized during the rent-free period. If expenses
relating to lease which should be borne by the Company are paid by the lessor of the assets they
shall be deducted from the total lease expenses and the balances shall be amortized over the lease
terms by the Company.Initial direct costs relating to lease transactions incurred by the Company shall be recognized into
current profit or loss. Contingent rental if included in the lease contract shall be recognized into
profit or loss upon occurrence.(ii) When the Company as a lessor lease income should be recognized over the lease terms on a
straight-line basis. If the lessor provides the rent-free period the Company shall allocate total lease
income over the entire lease terms including the rent-free period using straight-line basis or other
reasonable method. Lease income shall be recognized during the rent-free period. If expenses
relating to leases which should be borne by the lessee of the assets are paid by the Company they
shall be deducted from the total lease income and the balances shall be amortized over the lease
terms by the Company.Initial direct costs relating to lease transactions incurred by the Company shall be recognized into
current profit or loss; if the amounts are material they shall be capitalized and amortized over the
lease terms on the same basis as the recognition of lease income. Contingent rental if included in
the lease contract shall be recognized into profit or loss upon occurrence.(b) Accounting for finance leases
(i) When the Company as a lessee at commencement of the lease assets obtained through finance
leases should be recorded at the lower of their fair values and the present values of the minimum
lease payments. The Company shall recognize long-term payables at amounts equal to the minimum
lease payments and the differences shall be recognized as unrecognized finance charges which
shall be amortized over the lease terms as finance expenses by using effective interest rate method
and recognized into finance cost.Initial direct costs are recorded in the value of the leased assets.The Company adopts the same depreciation policy for the leased assets as its self-owned fixed
assets. Depreciation period is determined according to the lease contract. If it is reasonably certain
that the Company will obtain the ownership of the assets at the expiration of the lease the
depreciation period will be the useful lives of the leased assets. If it is not certain that the Company
will obtain the ownership of the asset at the expiration of the lease the depreciation period is the
shorter of the lease period and their useful lives.(ii) When the Company as a lessor at commencement of the lease lease receivables shall be
measured at minimum lease receivables plus initial direct costs relating to lease transactions and
recognized as long-term receivable in the statement of financial position. Unguaranteed residual
values are recorded simultaneously. The differences between the total of minimum lease receivable
initial direct cost and unguaranteed residual values and their present value shall be recognized as
unearned finance income and shall amortized over the lease terms as lease income at the effective
interest rate method.
3.30 Significant Accounting Policies and Accounting Estimates
Based on the historical experience and other factors including appropriate expectations of future events the Company
performed continuous assessment of important accounting estimates and key assumptions. The samples of important accounting
estimates and key assumptions that are likely to result in significant adjustment risk of the book value of assets and liabilities in the
next accounting year are as follows:
Classification of financial assets
The major judgments involved in determining the classification of financial assets include the analysis of business model and
contract cash flow characteristics.The Company determines the business model of managing financial assets at the level of financial portfolios. The factors
considered include the way to evaluate and report the performance of financial assets to key management personnel the risks
affecting the performance of financial assets and their management methods as well as the way for relevant business management
personnel to obtain remuneration etc.When evaluating whether the contract cash flow of financial assets is consistent with the basic loan arrangements the Company
has the following main judgments: whether the time distribution or amount of the principal may change in the duration due to
prepayment and other reasons; whether the interest only includes the time value of money credit risk other basic lending risks and
the consideration with cost and profit. For example does the amount of prepayment only reflect the outstanding principal and the
interest based on the outstanding principal as well as the reasonable compensation paid for the early termination of the contract.Measurement of expected credit loss of accounts receivable
The Company calculates the expected credit loss of accounts receivable through the default risk exposure of accounts receivable
and the expected credit loss rate and determines the expected credit loss rate based on the default probability and the default loss rate.In determining the expected credit loss rate the Company uses data including the internal historical credit loss experience and
adjusts the historical data according to the current situation and forward-looking information. When considering forward-looking
information the indicators used by the Company include the risk of economic downturn changes in external market environment
technical environment and customer situation etc. The Company regularly monitors and reviews the assumptions related to the
calculation of expected credit loss.
Deferred tax assets
To the extent that there is likely to be sufficient taxable profits to offset the losses deferred income
tax assets should be recognized for all unused tax losses. The management has to perform a lot of
judgment to estimate the time and amount of future taxable profits combined with tax planning
strategy to determine the amount of deferred income tax assets that should be recognized.
Determination of fair value of unlisted equity investment
The fair value of unlisted equity investment is the estimated future cash flow discounted according
to the current discount rate of projects with similar terms and risk characteristics. This kind of
valuation requires the company to estimate the expected future cash flow and discount rate so it is
uncertain. In limited circumstances if the information used to determine the fair value is
insufficient or the distribution range of the possible estimated amount of the fair value is wide and
the cost represents the best estimate of the fair value within the range the cost can represent the
appropriate estimate of the fair value within the distribution range.
3.31 Changes in Significant Accounting Policies and Accounting Estimates
(a) Changes in accounting policesOn July 5 2017 the Ministry of Finance issued “Accounting Standards for Business EnterprisesNo. 14 – Revenue” (CK [2017] No. 22) (the "New Revenue Standards"). Domestic listed
enterprises are required to implement the New Revenue Standards from January 1 2020. The
Company implemented the New Revenue Standards on January 1 2020 and adjusted the relevant
contents of accounting policies. Please refer to Notes 3.26 REVENUE for details.The New Revenue Standards requires that the cumulative impact of the first implementation of the
standard should be adjusted to the amount of retained earnings and other relevant items in the
financial statements at the beginning of the first implementation year (i.e. January 1 2020) and the
information of the comparable period should not be adjusted. When implementing the New
Revenue Standards the Company only adjusted the cumulative impact of contracts that have not
been completed on the first execution date.
Due to the implementation of the New Revenue Standards the Company’s consolidated financial
statements were adjusted accordingly. As of January 1 2020 the contract liabilities were CNY
23062146.90 other current liabilities were CNY 2998079.10 and the advance receipts were
CNY -26060226.00. The relevant adjustment has no effect on the shareholders' equity belonging to
the parent Company in the consolidated financial statements of the Company. There is no need to
adjust the financial statements of the parent Company of the Company.(b) Significant changes in accounting estimates
The Company has no significant changes in accounting estimates for the reporting period.(c) Adjustments of the financial statements at the beginning of the
reporting period for the first year adoption of new financial
instruments standards.
Consolidated Financial Statements
Unit: Yuan Currency: CNY
Items 31 December 2019 1 January 2020 Adjustment
Items 31 December 2019 1 January 2020 Adjustment
Current liabilities
Advances from customers 26060226.00 -26060226.00
Contract liabilities N/a. 23062146.90 23062146.90
Other current liabilities N/a. 2998079.10 2998079.10
Note 4. TAXATION
4.1 Major Categories of Tax and Tax Rates Applicable to the Company
axes Tax bases Tax rates
Value-added tax (VAT)
The taxable revenue from sales of goods or
rendering of services13%，11%，9%，5%，
6%，3%
Consumption tax The taxable revenue from sales of goods 10%
Housing property tax
For housing property levied on the basis of
price housing property tax is levied at the
rate of 1.2% of the balance after deducting
30% of the cost; for housing property levied
on the basis of rent housing property tax is
levied at the rate of 12% of rent revenue.
1.2%、12%
Urban maintenance and
construction tax
Turnover tax payable 7%
Education surcharge Turnover tax payable 3%
Local education surcharge Turnover tax payable 2%
Enterprise income tax Taxable income 20%、25%
Tax rates of income tax of different subsidiaries are stated as below:
Name of Taxpayer Rate of Income Tax
深圳市新永通机动车检测设备有限公司 (Shenzhen Xinyongtong Auto
Vehicle Inspection Equipment Co. Ltd.)
20%
深圳市华日安信汽车检测有限公司 (Shenzhen Huari Anxin Automobile
Inspection Co. Ltd.)
20%
Taxpayers other than the above-mentioned 25%
4.2 Tax Preference
Pursuant to the document numbered Cai Shui [2019] 13 issued by State Taxation Administration
Shenzhen Xinyongtong Auto Vehicle Inspection Equipment Co. Ltd. and Shenzhen Huari Anxin
Auto Vehicle Inspection Co. Ltd. enjoys the preferential tax policy for micro and small-sized
enterprises and is subject to the enterprise income tax rate of 20%.Note 5. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5.1 Monetary funds
(1) Details
Items 31 Dec 2020 31 Dec 2019
Cash on hand 20542.55 120351.17
Cash in bank 237605156.38 428731254.87
Total 237625698.93 428851606.04
(1) The bank deposit of CNY 29163042.30 is the supervision fund of the company's development
of plot 03 of the upgrading and reconstruction project of Tellus-Jimeng gold jewelry industrial park.In addition there is no other money with limited use and potential recovery risk due to mortgage
pledge or freezing in the monetary fund at the end of the period.
(2) The monetary fund at the end of the period decreased by 44.59% compared with that at the
beginning of the period mainly due to the payment of enterprise income tax on equity transfer of
Xinglong company the distribution of cash dividends and the purchase of financial products.
5.2 Held-for-trading financial assets
Items 31 Dec 2020 31 Dec 2019
Financial assets classified as at fair value
through profit or loss
314013869.86 60486575.34
Including: Debt instrument investments 314013869.86 60486575.34
Total 314013869.86 60486575.34
The trading financial assets at the end of the period increased by 419.15% compared with the beginning of the period mainly due to
the company using idle self owned funds for cash management.5.3 Accounts receivable
(1) Details on ages
Items 31 Dec 2020 31 Dec 2019
Within 1 year 20025574.10 113750731.59
1-2 years 3360.00
2-3 years
Over 3 years 49125862.29 49125862.29
Subtotal 69154796.39 162876593.88
Less: provision for bad debts 49326286.03 50263369.61
Total 19828510.36 112613224.27
Accounts receivable at the end of the period decreased by 82.39% compared with that at the beginning of the period mainly because
Sichuan Tellus Jewelry Technology Co. Ltd. stopped operation this year and recovered all accounts receivable at the beginning of the
period.
(2) Details on categories
Categories
Closing balance
Book balance Provision for bad debts
Carrying amount
Amount % to total Amount
Provision
proportion
(%)
Receivables with
provision made on
an individual basis
49125862.29 71.04 49125862.29 100.00
Receivables with
provision made on
a collective basis
20028934.10 28.96 200423.74 1.00 19828510.36
Total 69154796.39 100.00 49326286.03 71.33 19828510.36
(Continued)
Categories Opening balance
Book balance Provision for bad debts
Carrying amount
Amount % to total Amount
Provision
proportion
(%)
Receivables with
provision made on
an individual basis
49125862.29 30.16 49125862.29 100.00
Receivables with
provision made on
a collective basis
113750731.59 69.84 1137507.32 1.00 112613224.27
Total 162876593.88 100.00 50263369.61 30.86 112613224.27
Specific description of provision for bad debts:
(a) Accounts receivable with provision made on an individual basis
Debtors Book balance
Provision for
bad debts
Provision
proportion (%)
Reasons深圳市金路工贸公司
(Shenzhen Jinlu Industrial
and Trading Co. Ltd.?)
9846607.00 9846607.00 100.00
Expected to be
unrecoverable
due to long ages广东湛江三星汽车股份有
限 公 司 (Guangdong
Zhanjiang Sanxing
Automobile Co. Ltd.*)
4060329.44 4060329.44 100.00
Expected to be
unrecoverable
due to long ages王昌龙
(WANG Changlong)
2370760.40 2370760.40 100.00
Expected to be
unrecoverable
due to long ages惠州市建达城道桥工程公
司 (Huizhou Jiandacheng
Road and Bridge
2021657.70 2021657.70 100.00
Expected to be
unrecoverable
due to long ages
? The English names are for identification purpose only.Debtors Book balance
Provision for
bad debts
Provision
proportion (%)
Reasons
Engineering Co. Ltd.*)江铃汽车制造厂
(Jiangling Automobile
Factory*)
1191059.98 1191059.98 100.00
Expected to be
unrecoverable
due to long ages阳江市汽车贸易有限公司
(Yangjiang Automobile
Trading Co. Ltd.*)
1150000.00 1150000.00 100.00
Expected to be
unrecoverable
due to long ages广东省物资集团
(Guangdong Materials
Group Corporation*)
1862000.00 1862000.00 100.00
Expected to be
unrecoverable
due to long ages
Others 26623447.77 26623447.77 100.00
Expected to be
unrecoverable
due to long ages
Subtotal 49125862.29 49125862.29 100.00
(b) Account receivables with provision for bad debts made on a collective basis using age analysis method
Ages
31 Dec 2020
Book balance Provision for bad debts Provision proportion (%)
Within 1 year 20025574.10 200255.74 1.00
1 - 2 years 3360.00 168.00 5.00
Subtotal 20028934.10 200423.74 1.00
(Continued)
Ages
31 Dec 2019
Book balance Provision for bad debts Provision proportion (%)
Within 1 year 12352039.14 123520.40 1.00
Subtotal 12352039.14 123520.40 1.00
* The English names are for identification purpose only.(3) Changes in provision for bad debts
Items
Opening
balance
Increase Decrease
Closing
balanceAccrual
Recover
y
Others Reversal
Written-o
ff
Others
Receivables
with
provision
made on an
individual
basis
49125862.29 49125862.29
Receivables
with
provision
made on a
collective
basis
1137507.32 -937083.58 200423.74
Subtotal 50263369.61 -937083.58 49326286.03
(4) Details of the top 5 debtors with largest balances
Debtors Book balance
Proportion to the total
balance of accounts
receivable (%)
Provision for
bad debts
深圳市金路工贸公司 (Shenzhen Jinlu
industry and Trade Co. Ltd.*)
9846607.00 14.24 9846607.00
广 东 湛 江 三 星 汽 车 股 份 有 限 公 司
(Guangdong Samsung Automobile Co.Ltd.*)
4060329.44 5.87 4060329.44
深 圳 市 尚 金 缘 珠 宝 实 业 有 限 公 司
(Shenzhen shangjinyuan Jewelry Industry
Co. Ltd.*)
3390652.67 4.90 33906.53
王昌龙(Wang Changlong) 2370760.40 3.43 2370760.40
广东省物资集团 (Guangdong Materials 1862000.00 2.69 1862000.00
Debtors Book balance
Proportion to the total
balance of accounts
receivable (%)
Provision for
bad debts
Group)
Subtotal 21530349.51 31.13 18173603.37
5.4 Prepayments
(1) Details on ages
Ages
31 Dec 2020 31 Dec 2019
Book balance % to total Book balance % to total
Within 1 year 9834423.80 99.86 12671077.95 99.90
1-2 years 800.00 0.01 632.00 0.01
2-3 years 632.00 0.01
Over 3 years 11893.94 0.12 11893.94 0.09
Total 9847749.74 100.00 12683603.89 100.00
(2) Details of the top 5 debtors with largest balances
Debtors Book balance
Proportion to the total balance
of advances paid (%)
一汽丰田汽车销售有限公司
(FAWToyota Motor Sales Co. Ltd.?)
7906522.88 80.29
丰田汽车(中国)投资有限公司
(Toyota Motor (China) Investment Co. Ltd.*)
1283704.00 13.04
深 圳 聚 融 丰 科 技 有 限 公 司 (Shenzhen
jurongfeng Technology Co. Ltd.*)
192890.99 1.96中国太平洋财产保险股份有限公司深圳分
公 司 (Shenzhen Branch of China Pacific
Property Insurance Co. Ltd.*)
154717.00 1.57
小鹏汽车销售有限公司 102554.58 1.04
? The English names are for identification purpose only.Debtors Book balance
Proportion to the total balance
of advances paid (%)
(Xiaopeng Automobile Sales Co. Ltd.*)
Subtotal 9640389.45 97.89
5.5 Other Receivables
(1) Details
Items Closing balance Opening balance
Interest receivable
Dividend receivable 24647732.42 39647732.42
Other receivables 4622058.41 5260813.98
Total 29269790.83 44908546.40
(2) Dividend receivable
(a) Details
Items Closing balance Opening balance中国浦发机械工业股份有限公司
(China Perfect Machinery Industry Corp. Ltd.?)
547184.35 547184.35深圳东风汽车有限公司
(Shenzhen Dongfeng Automobile Co. Ltd.*)
24100548.07 39100548.07
Subtotal 24647732.42 39647732.42
Less: provision for bad debts
Total 24647732.42 39647732.42
(b) Dividend receivable over 1 year
Items Closing balance Ages Reasons Notes深圳东风汽车有限公司
(Shenzhen Dongfeng
Automobile Co. Ltd.*)
24100548.07
1 – 2
years
Not yet paid until
2022.08 through
BOD decision
No
impairment
? The English names are for identification purpose only.Items Closing balance Ages Reasons Notes
Total 24100548.07
(3) Other receivables
(a) Other receivables categorized by ages
Ages Closing Balance Opening Balance
Within 1 year 1800294.61 2120412.24
1 – 2 years 161722.86 663633.11
2 – 3 years 417554.97 116202.70
Over 3 years 54005535.26 54715279.65
Subtotal 56385107.70 57615527.70
Less: provision for bad debts 51763049.29 52354713.72
Total 4622058.41 5260813.98
(b) Other receivables categorized by nature
Nature of receivables Closing balance Opening balance
Deposit as security 477190.50 35477.21
Reserve fund 13822.20 43385.72
Temporary advance payment receivable 55894095.00 57536664.77
Subtotal 56385107.70 57615527.70
Less: provision for bad debts 51763049.29 52354713.72
Total 4622058.41 5260813.98
(c) Other receivables categorized by methods of provision for bad debts
A. As of 2020-12-31 provision for bad debts according to the model of phase I/II/III:
Phase Closing balance Provision for bad debts Opening balance
I 2379572.44 109600.10 2269972.34
II
III 54005535.26 51653449.19 2352086.07
Phase Closing balance Provision for bad debts Opening balance
Total 56385107.70 51763049.29 4622058.41
As of 2020-12-31 provision for bad debts at phase I:
Catagories Book Balance
Provision
proportion
(%)
Provision
for bad
debts
Carrying
Amount
Reasons for
provision
made
Receivables with
provision made on
an individual basis
Receivables with
provision made on a
collective basis
2379572.44 4.61 109600.10 2269972.34
1. P
ortfolio grouped
with ages
1931494.44 5.44 105119.32 1826375.12
no dramatic
credit risk
change after
confirmed
2. P
ortfolio grouped
with deposit as
security
448078.00 1.00 4480.78 443597.22
no dramatic
credit risk
change after
confirmed
Total 2379572.44 4.61 109600.10 2269972.34
As of 2020-12-31 provision for bad debts at phase III:
Catagories Book Balance
Provision
proportion
(%)
Provision for
bad debts
Carrying
Amount
Reasons for
provision
made
Receivables with
provision made on
an individual basis
49301363.12 100.00 49301363.12
credit risk
change
dramatically
after
confirmed
Receivables with 4704172.14 50.00 2352086.07 2352086.07
Catagories Book Balance
Provision
proportion
(%)
Provision for
bad debts
Carrying
Amount
Reasons for
provision
made
provision made on a
collective basis
1. P
ortfolio grouped
with ages
4675059.64 50.00 2337529.82 2337529.82
credit risk
change
dramatically
after
confirmed
2. P
ortfolio grouped
with deposit as
security
29112.50 50.00 14556.25 14556.25
Total 54005535.26 95.64 51653449.19 2352086.07
B. As of 2019-12-31 provision for bad debts according to the model of phase I/II/III:
Phase Closing balance Provision for bad debts Opening balance
I 7776632.54 2515818.56 5260813.98
II
III 49838895.16 49838895.16
Total 57615527.70 52354713.72 5260813.98
As of 2019-12-31 provision for bad debts at phase I:
Catagories Book Balance
Provision
proportion
(%)
Provision for
bad debts
Carrying
Amount
Reasons for
provision
made
Receivables with
provision made on
an individual basis
Receivables with
provision made on a
7776632.54 73.52 2515818.56 5260813.98
Catagories Book Balance
Provision
proportion
(%)
Provision for
bad debts
Carrying
Amount
Reasons for
provision
made
collective basis
1. P
ortfolio grouped
with ages
7741155.33 32.31 2501198.66 5239956.67
no dramatic
credit risk
change after
confirmed
2. P
ortfolio grouped
with deposit as
security
35477.21 41.21 14619.90 20857.31
no dramatic
credit risk
change after
confirmed
Total 7776632.54 73.52 2515818.56 5260813.98
As of 2019-12-31 provision for bad debts at phase III:
Catagories Book Balance
Provision
proportion (%)
Provision for
bad debts
Carrying
Amount
Reasons for
provision made
Receivables with
provision made on
an individual basis
49838895.16 100.00 49838895.16
credit risk
change
dramatically
after confirmed
Receivables with
provision made on
an collective basis
Total 49838895.16 100.00 49838895.16
As of 2020-12-31 other receivables with provision made on an individual basis
Debtors Book balance
Provision for
bad debts
Provision
proportion (%)中汽华南汽车销售公司
(Zhongqi South China Automobile Sales Co.Ltd.?)
9832956.37 9832956.37 100.00南方工贸深圳实业公司
(Shenzhen Nanfang Industry and Trade Co.
7359060.75 7359060.75 100.00
? The English names are for identification purpose only.Debtors Book balance
Provision for
bad debts
Provision
proportion (%)
Ltd.*)
深圳中浩（集团）股份有限公司
(Shenzhen Zhonghao (Group) Co. Ltd.*)
5000000.00 5000000.00 100.00金贝丽家电公司
(Jinbeili Household Appliances Co. Ltd.*)
2706983.51 2706983.51 100.00深圳市新兴泰贸易有限公司
(Shenzhen Xinxingtai Trading Co. Ltd.*)
2418512.90 2418512.90 100.00
深圳石油化工（集团）股份有限公司
(Shenzhen Petrochemical (Group) Co. Ltd.*)
1903819.59 1903819.59 100.00深圳市特发华通包装实业有限公司
(Shenzhen SDG Huatong Packaging Co.Ltd.*)
1212373.79 1212373.79 100.00深圳金鹤标准件模具有限公司
(Shenzhen Jinhe Mould Co. Ltd.*)
1023560.00 1023560.00 100.00
Others 17844096.21 17844096.21 100.00
Total 49301363.12 49301363.12 100.00
As of 2020-12-31 other receivables with provision made on an collective basis
Catagories Book Balance
Provision proportion
(%)
Provision for
bad debts
1. P
ortfolio grouped with ages
6606554.08 2442649.14 36.97
Including: Within 1 year 1352216.61 13522.17 1.00
1 – 2 years 161722.86 8086.15 5.00
2 – 3 years 417554.97 83511.00 20.00
Over 3 years 4675059.64 2337529.82 50.00
2. P
ortfolio grouped with
deposit as security
477190.5 19037.0 3.99
Catagories Book Balance
Provision proportion
(%)
Provision for
bad debts
Total 7083744.58 2461686.14 34.75
As of 2019-12-31 other receivables with provision made on an collective basis
Catagories Book Balance
Provision proportion
(%)
Provision for
bad debts
1. P
ortfolio grouped with ages
7741155.33 2514044.83 32.48
Including: Within 1 year 2120409.03 21204.09 1.00
1 – 2 years 628159.11 31407.95 5.00
2 – 3 years 116202.70 23240.54 20.00
Over 3 years 4876384.49 2438192.25 50.00
2. P
ortfolio grouped with
deposit as security
35477.21 1773.73 5.00
Total 7776632.54 2515818.56 32.35
(d) Changes in provision for bad debts
Items
Phase I Phase II Phase III
Total12?month
expected credit
losses
Lifetime
expected credit
losses (credit not
impaired)
Lifetime
expected credit
losses (credit
impaired)
Opening balance 2515818.56 49838895.16 52354713.72
Opening balance in current
period
-2352086.07 2352086.07
--Transferred to phase II NA NA
--Transferred to phase III -2352086.07 2352086.07
--Reversed to phase II NA NA
Items
Phase I Phase II Phase III
Total12?month
expected credit
losses
Lifetime
expected credit
losses (credit not
impaired)
Lifetime
expected credit
losses (credit
impaired)
--Reversed to phase I NA
Provision made in current
period
-54132.39 -44236.71 -98369.10
Provision recovered in
current period
493295.33 493295.33
Provision reversed in
current period
Provision written-off in
current period
Other changes
Closing balance 109600.10 51653449.19 51763049.29
(e) Details of the top 5 debtors with largest balances
Debtors
Nature of
receivables
Book balance Ages
Proportion to the
total balance of
other receivables
(%)
Provision for
bad debts
Zhongqi South China
Automobile Sales
Co. Ltd.
Current
account
9832956.37
Over 3
years
17.44 9832956.37
Shenzhen Nanfang
Industry and Trade
Co. Ltd.
Current
account
7359060.75
Over 3
years
13.05 7359060.75
Shenzhen Zhonghao
(Group) Co. Ltd.
Current
account
5000000.00
Over 3
years
8.87 5000000.00
Debtors
Nature of
receivables
Book balance Ages
Proportion to the
total balance of
other receivables
(%)
Provision for
bad debts深圳凯丰特种汽车工业有限公司
(Shenzhen Kaifeng
Special Automobile
Industry Co. Ltd.*)
Current
account
4413728.50
Over 3
years
7.83 4413728.50
Jinbeili Household
Appliances Co. Ltd.
Current
account
2706983.51
Over 3
years
4.80 2706983.51
Total 29312729.13 51.99 29312729.13
5.6 Inventories
(1) Details
Items
Closing balance Opening balance
Book balance
Provision for
write-down
Carrying
amount
Book balance
Provision for
write-down
Carrying
amount
Raw materials 15481888.98 14772382.17 709506.81 15079409.32 14772382.17 307027.15
Goods on hand 35515473.74 14145300.62 21370173.12 35204057.35 14121481.67 21082575.68
Goods on
consignment-in
6307872.38 6307872.38
Goods on
consignment-in
sold
-6307872.38 -6307872.38
Total 50997362.72 28917682.79 22079679.93 50283466.67 28893863.84 21389602.83
(2) Provision for inventory write-down
Items Opening balance Increase Decrease Closing
balance
Provision Others
Reversal or
written-off
Others
Raw materials 14772382.17 14772382.17
Goods on hand 14121481.67 23818.95 14145300.62
Subtotal 28893863.84 23818.95 28917682.79
(3) The closing balance of inventory contains a statement of borrowing expenses capitalization:
As of 2020-12-31 the closing balance of inventory do not contain the capitalization of borrowing expenses.
(4) Goods on consignment-in: sold by Shenzhen jewelry company.
5.7 Other Current Assets
Items Closing balance Opening balance [Note]
Input VAT to be credited 6000566.69 3403969.23
Total 6000566.69 3403969.23
The closing balance of other current assets increased by 76.28% compared with the opening balance mainly due to the increase of
VAT to be deducted by “Baoku supply chain company” and “Shenzhen jewelry company”.
5.8 Long-term receivables
(1) Details of long-term receivables
Items
31 Dec 2020 31 Dec 2019 Discount
rate
range
Book balance
Provision for
bad debts
Carrying
amount
Book balance
Provision for
bad debts
Carrying
amount
Related
transactions
2179203.68 2179203.68 2179203.68 2179203.68
Total 2179203.68 2179203.68 2179203.68 2179203.68
(2) Changes in provision for bad debts
(a) As of December 31 2020 the provision for bad debts shall be made according to the following three stages:
Stage Book balance Provision for bad debts Carrying accounts
Stage 3 2179203.68 2179203.68
Stage Book balance Provision for bad debts Carrying accounts
Total 2179203.68 2179203.68
As of December 31 2020 the provision for bad debts of long-term receivables in the third stage is as follows:
Category Book balance
Provision rate
（%）
Provision for
bad debts
Carrying
accounts
Reason
Provision for bad
debts by single item
2179203.68 100.00 2179203.68
Risk increased
after originally
recognized
Total 2179203.68 100.00 2179203.68
(b) As of December 31 2019 the provision for bad debts is calculated and drawn according to the third stage model as follows:
Stage Book balance Provision for bad debts Carrying accounts
Stage 3 2179203.68 2179203.68
Total 2179203.68 2179203.68
On December 31 2019 the provision for bad debts of long-term receivables in the third stage is as follows:
Category Book balance
Provision rate
（%）
Provision for
bad debts
Carrying
accounts
Reason
Provision for bad
debts by single item
2179203.68 100.00 2179203.68
Risk increased
after originally
recognized
Total 2179203.68 100.00 2179203.68
（3）Changes on provision for bad debts
Provision for bad debts
Stage 1 Stage 2 Stage 3
TotalExpected credit
loss in the next
12 months
Expected credit
loss for the whole
life (no credit
impairment)
Expected credit loss
for the whole life
(credit impairment
occurred)
Balance on 1 Jan 2020 2179203.68 2179203.68
Balance on 1 Jan 2020 in
the current period
— — — —
--turn into stage 2 NA NA
-- turn into stage 3 NA
Provision for bad debts
Stage 1 Stage 2 Stage 3
TotalExpected credit
loss in the next
12 months
Expected credit
loss for the whole
life (no credit
impairment)
Expected credit loss
for the whole life
(credit impairment
occurred)
-- turn back to stage 2 NA NA
-- turn back to stage 1 NA
Accrued in current
period
Reversal in current
period
Current write off
Write off in current
period
Other changes
Balance on 31 Dec 2020 2179203.68 2179203.68
5.9. Long-term equity investments
(1) Categories
Items
Closing balance Opening balance
Book balance
Provision for
impairment
Carrying amount Book balance
Provision for
impairment
Carrying amount
Investments in
associates
87921195.60 14644406.04 73276789.56 94822114.42 14644406.04 80177708.38
Investments in
joint ventures
50364166.01 50364166.01 82000835.67 82000835.67
Other equity
investments
8656000.00 8656000.00 8656000.00 8656000.00
Total 146941361.61 23300406.04 123640955.57 185478950.09 23300406.04 162178544.05
(2) Details
Investees Opening balance Increase/Decrease
Investment
s increased
Investments
decreased
Investment income
recognized under
equity method
Adjustment in other
comprehensive
income
Joint ventures深圳特力吉盟投资有限公司
(Shenzhen Tellus Jimeng
Investment Co. Ltd.*)
70155383.50 35000000.00 10511357.63深圳市特力行投资有限公司
(Shenzhen Tellus Xing
Investment Co. Ltd.*)
11845452.17 851972.71
Subtotal 82000835.67 35000000.00 11363330.34
Associates深圳市仁孚特力汽车服务有
限 公 司 (Shenzhen Renfu
Tellus Automobiles Service
Co. Ltd.*)
33313732.20 10793413.94深圳市汽车工业进出口有限
公司 (Shenzhen Automobile
Industry Import and Export
Co. Ltd.*)
2026407.98 -1031137.65
Shenzhen Dongfeng
Automobile Co. Ltd.
44837568.20 -6163195.11深圳市新永通油泵环保有限
公 司 (Shenzhen
Xinyongtong Oil Pump and
Environmental Protection
Co. Ltd.*)深圳市新永通咨询有限公司
(Shenzhen Xinyongtong
Consulting Co. Ltd.*)
* The English names are for identification purpose only.Investees Opening balance
Increase/Decrease
Investment
s increased
Investments
decreased
Investment income
recognized under
equity method
Adjustment in other
comprehensive
income深圳特力汽车服务连锁有限
公 司 (Shenzhen Tellus
Automobile Services Chain
Co. Ltd.*) [Note 3]深圳市新永通汽车服务有限
公 司 (Shenzhen
Xinyongtong Automobile
Service Co. Ltd.*) [Note 3]深圳市新永通东晓汽车服务有限公司
(Shenzhen Xinyongtong
Dongxiao Automobile Service
Co. Ltd.*) [Note 3]深圳市永通信达检测设备有
限 责 任 公 司 (Shenzhen
Yongtong Xinda Inspection
Equipment Co. Ltd.*) [Note
3]湖南昌阳实业股份有限公司
(Hunan Changyang Industrial
Co. Ltd.*) [Note 1]深圳捷成电子有限公司
(Shenzhen Jiecheng
Electronic Co. Ltd.*) [Note 1]深圳先导新材料有限公司
(Shenzhen Xiandao New
Materials Co. Ltd.*) [Note 1]中国汽车工业深圳贸易公司
(China Automobile Shenzhen
Investees Opening balance
Increase/Decrease
Investment
s increased
Investments
decreased
Investment income
recognized under
equity method
Adjustment in other
comprehensive
income
Trading Co. Ltd. *) [Note 1]深圳通用标准件有限公司
(Shenzhen General Standard
Parts Co. Ltd.*) [Note 1]
Zhongqi South China
Automobile Sales Co. Ltd.
[Note 1]深圳百力源电源有限公司
(Shenzhen Bailiyuan Power
Co. Ltd.*) [Note 1]深圳市益民汽车贸易公司
(Shenzhen Yimin Automobile
Trading Co. Ltd.*) [Note 1]深圳火炬火花塞工业公司
(Shenzhen Torch Spark Plug
Industrial Co. Ltd.*)
Subtotal 80177708.38 3599081.18深圳汉力高技术陶瓷有限公
司 (Shenzhen Haneco
Technologies Ceramics Co.Ltd.*) [Note 2]深圳市南方汽车维修中心
(Nanfang Automobile
Repairing Center*) [Note 2]
Subtotal
Total 162178544.05 35000000.00 14962411.52
(Continued)
Investees Increase/Decrease Closing
balance
Closing
balance of
provision for
impairment
* The English names are for identification purpose only.Changes in other
equity
Cash
dividend/prof
it declared
for
distribution
Provision
for
impairment
Others
Joint ventures
Shenzhen Tellus Jimeng
Investment Co. Ltd.
8000000.00 37666741.13
Shenzhen Tellus Xing
Investment Co. Ltd.
12697424.88
Subtotal 8000000.00 50364166.01
Associates
Shenzhen Renfu Tellus
Automobiles Service Co.
Ltd.
10500000.0 33607146.14
Shenzhen Automobile
Industry Import and Export
Co. Ltd.
995270.33
Shenzhen Dongfeng
Automobile Co. Ltd.
38674373.09
Shenzhen Xinyongtong Oil
Pump and Environmental
Protection Co. Ltd.
127836.59
Shenzhen Xinyongtong
Consulting Co. Ltd.
41556.83
Shenzhen Tellus
Automobile Services Chain
Co. Ltd. [Note 3]
Shenzhen Xinyongtong
Automobile Service Co.
Ltd. [Note 3]
Shenzhen Xinyongtong
Dongxiao Automobile
Service Co. Ltd. [Note 3]
Investees
Increase/Decrease
Closing
balance
Closing
balance of
provision for
impairment
Changes in other
equity
Cash
dividend/prof
it declared
for
distribution
Provision
for
impairment
Others
Shenzhen Yongtong Xinda
Inspection Equipment Co.Ltd. [Note 3]
Hunan Changyang
Industrial Co. Ltd. [Note 1]
1810540.70
Shenzhen Jiecheng
Electronic Co. Ltd. [Note
1]
3225000.00
Shenzhen Xiandao New
Materials Co. Ltd. [Note 1]
4751621.62
China Automobile
Shenzhen Trading Co. Ltd.[Note 1]
400000.00
Shenzhen General Standard
Parts Co. Ltd. [Note 1]
500000.00
Zhongqi South China
Automobile Sales Co. Ltd.
[Note 1]
2250000.00
Shenzhen Bailiyuan Power
Co. Ltd. [Note 1]
1320000.00
Shenzhen Yimin
Automobile Trading Co.
Ltd. [Note 1]
200001.10
Shenzhen Torch Spark Plug
Industrial Co. Ltd.
17849.20
Subtotal 10500000.00 73276789.56 14644406.04
Shenzhen Haneco 1956000.00
Investees
Increase/Decrease
Closing
balance
Closing
balance of
provision for
impairment
Changes in other
equity
Cash
dividend/prof
it declared
for
distribution
Provision
for
impairment
Others
Technologies Ceramics Co.Ltd. [Note 2]
Shenzhen Nanfang
Automobile Repairing
Center[Note 2]
6700000.00
Subtotal 8656000.00
Total 18500000.00 123640955.57 23300406.04
Note 1: Industrial and commercial registration of these companies has been revoked and the Company has made full provision for
impairment for these long-term equity investments.Note 2: The operating period of Shenzhen Haneco Technologies Ceramics Co. Ltd. ran from September 21 1993 to September 21
1998. The operating period of Shenzhen Nanfang Automobile Repairing Center ran from July 12 1994 to July 11 2002. These
companies have ceased operation for many years and their industrial and commercial registration has been revoked because they did
not participate in the annual industrial and commercial inspection. The Company is unable to exercise effective control over these
companies. Therefore they are not included in the consolidated scope of the Company’ s consolidated financial statements. The
carrying amount of the Company’s investment in these companies is zero.Note 3: The book balances of these long-term equity investments have been adjusted to 0 yuan through the recognition of profit and
loss adjustments under equity method.Note 4: The equity of the company held by us has been transferred in the current period.Note 5: We hold 51% of the equity of the Company. According to the articles of association of the company the rights of voting and
nominated directors cannot be unilaterally decided on the relevant decisions by the company's shareholders' meeting and the board of
directors and we do not control the company.
5.10 Other equity instrument investments
（1）Details of other equity instrument investments
Items 31 Dec 2020 31 Dec 2019
Items 31 Dec 2020 31 Dec 2019
Public equity instrument investment
Non-public equity instrument investment 10176617.20 10176617.20
Total 10176617.20 10176617.20
(2) Details of non-held-for-trading equity instrument investments
Items
Dividend
income
recognized in
the current
period
Accumulate
d profits
Accumulate
d loss
Amount of other
comprehensive
income transferred
to retained
earnings
Reasons designated as
fair value
measurement with
changes included in
other comprehensive
income
Reasons for
transferring
other
comprehensiv
e income into
retained
earnings
China Perfect
Machinery
Industry Corp.Ltd.Strategic investment
expected to be held
for a long time
5.11 Investment property
(1) Investment real estate with cost measurement model
Items
Buildings and
structures
Land use right Total
Cost
Opening balance 614240458.56 49079520.00 663319978.56
Increase 37438357.93 37438357.93
1) Transferred in from construction
in progress
37438357.93 37438357.93
Decrease 12443191.04 12443191.04
1) Disposal 12443191.04 12443191.04
Closing balance 639235625.45 49079520.00 688315145.45
Accumulated depreciation and
Items
Buildings and
structures
Land use right Total
amortization
Opening balance 107605031.33 1115443.68 108720475.01
Increase 17906594.06 1115443.68 19022037.74
1) Accrual 17906594.06 1115443.68 19022037.74
Decrease 7673983.43 7673983.43
1) Disposal 7673983.43 7673983.43
Closing balance 117837641.96 2230887.36 120068529.32
Provision for impairment
Carrying amount
Closing balance 521397983.49 46848632.64 568246616.13
Opening balance 506635427.23 47964076.32 554599503.55
(2) Investment property with certificate of titles being unsettled
Items Carrying amount Reasons for unsettlement
水贝珠宝大厦一期（房屋及建筑物）
(Shuibei Jewelry Building Phase I
(Buildings and structures))
412443066.95 The project has not been settled.
笋岗 12栋(Building 12 Sungang) 15040.85
Due to historical reasons certificate of
titles has not been applied for.
笋岗 12 栋商铺 (Building 12 stores
Sungang)
46793.43
Due to historical reasons certificate of
titles has not been applied for.Subtotal 412504901.23
5.12 Fixed assets
（1）Details by category
Items 31 Dec 2020 31 Dec 2019
Fixed assets 119136917.91 107119796.59
Liquidation of fixed assets
Total 119136917.91 107119796.59
(2) Fixed assets
(a) Details of fixed assets
Items
Buildings and
structures
General
equipment
Transport
facilities
Electronic
equipment
Office and
other
equipment
Total
Cost
Opening balance 268959874.26 11370001.49 5187935.34 9732341.99 3030248.40 298280401.48
Increase 12443191.04 11186927.89 219281.00 1278771.32 3709362.43 28837533.68
1) Acquisition 11186927.89 219281.00 1278771.32 3709362.43 16394342.64
2) Investment
property transfer
12443191.04 12443191.04
Decrease 272894.67 230000.00 110066.13 20528.99 633489.79
1) Disposal/scrap 272894.67 230000.00 110066.13 20528.99 633489.79
Closing balance 281403065.30 22284034.71 5177216.34 10901047.18 6719081.84 326484445.37
Accumulated
depreciation
Opening balance 166475800.36 8364746.10 3201785.74 6873351.21 1999468.42 186915151.83
Increase 14775455.46 442617.47 431742.26 809244.24 264009.74 16723069.17
1) Accrual 7101472.03 442617.47 431742.26 809244.24 264009.74 9049085.74
2) Investment
property transfer
7673983.43 7673983.43
Decrease 245605.22 207000.00 81354.82 2186.56 536146.60
1) Disposal/scrap 245605.22 207000.00 81354.82 2186.56 536146.60
Closing balance 181251255.82 8561758.35 3426528.00 7601240.63 2261291.60 203102074.40
Provision for
impairment
Opening balance 3836768.43 319675.11 6165.00 17984.71 64859.81 4245453.06
Increase
Items
Buildings and
structures
General
equipment
Transport
facilities
Electronic
equipment
Office and
other
equipment
Total
1) Accrual
Decrease
1) Disposal/scrap
Closing balance 3836768.43 319675.11 6165.00 17984.71 64859.81 4245453.06
Carrying amount
Closing balance 96315041.05 13402601.25 1744523.34 3281821.84 4392930.43 119136917.91
Opening balance 98647305.47 2685580.28 1979984.60 2841006.07 965920.17 107119796.59
(b) Fixed assets rented-out under operating leases
Items Carrying amount
Buildings and structures 70237123.25
Subtotal 70237123.25
(c) Fixed assets with certificate of titles being unsettled
Items Carrying amount Reasons for unsettlement
Yongtong Building 31023972.67
Due to historical reasons certificate of
titles has not been applied for.
Automobile Building 15560410.09
Due to historical reasons certificate of
titles has not been applied for.Tellus Building underground
parking lot
8991413.36
Unable to apply for certificate of titles
for parking lot
Zhonghe Office Building 4645064.13
Due to historical reasons certificate of
titles has not been applied for.Third – Fifth floor of Plant 1
Plant 2 and Plant 3 on Taoyuan
Road
3522418.75
Due to historical reasons certificate of
titles has not been applied for.Tellus Building transfer story 1538482.04 Unable to apply for certificate of titles
Building 16 of Taohua Yuan 1374667.14
Due to historical reasons certificate of
titles has not been applied for.Items Carrying amount Reasons for unsettlement
Shuibei Zhongtian Complex
Building
889629.30
Due to historical reasons certificate of
titles has not been applied for.
First floor of commercial and
residential building in Bao’an
885412.77
Due to historical reasons certificate of
titles has not been applied for.Warehouse 839327.89
Due to historical reasons certificate of
titles has not been applied for.Warehouse of trade department 71133.73
Due to historical reasons certificate of
titles has not been applied for.Songquan Apartment (Mix) 10086.79
Due to historical reasons certificate of
titles has not been applied for.Hostel on North Renmin Road 5902.41
Due to historical reasons certificate of
titles has not been applied for.Subtotal 69357921.07
5.13 Construction in progress
（1）Details by category
Projects 31 Dec 2020 31 Dec 2019
Construction in progress 101740485.48 47654393.55
Engineer materials
Total 101740485.48 47654393.55
The construction in progress at the end of the period increased by 113.50% compared with that at the beginning of the period mainly
due to the increase in construction investment of Tellus Diamond Trading building.
（2）Construction in progress
(a) details
Projects
31 Dec 2020 31 Dec 2019
Book balance
Provision
for
impairment
Carrying
amount
Book balance
Provision
for
impairment
Carrying
amount
Projects
31 Dec 2020 31 Dec 2019
Book balance
Provision
for
impairment
Carrying
amount
Book balance
Provision
for
impairment
Carrying
amount
特力金钻交易大厦(Teli
Diamond Trading
Building)
100252309.72 100252309.72 35321704.26 35321704.26特力水贝珠宝大厦地下
连通工程 (Underground
connection project of
telishuibei jewelry
building)
3710247.00 3710247.00
421 厂房改造升级项目
(421 plant renovation and
upgrading project)
8593316.07 8593316.07
宝库项目(Treasure house
project)
29126.22 29126.22
05地块(Plot 05) 1391331.44 1391331.44
其 他 工 程 (Other
construction)
96844.32 96844.32
Total 101740485.48 101740485.48 47654393.55 47654393.55
(b) changes on significant construction in progress
Projects Budgets
Opening
balance
Increase
Transferred to
fixed assets
Other
decrease
Closing balance特力金钻交易大厦
(Teli Diamond
Trading Building)
515460000 35321704.26 64930605.46 100252309.72特力水贝珠宝大厦
地 下 连 通 工 程
(Underground
13330000 3710247.00 9620961.88 13331208.88
Projects Budgets
Opening
balance
Increase
Transferred to
fixed assets
Other
decrease
Closing balance
connection project
of telishuibei
jewelry building)
421 厂房改造升级
项 目 (421 plant
renovation and
upgrading project)
29910000 8593316.07 15513832.98 24107149.05
Total 47625267.33 90065400.32 37438357.93 100252309.72
（Continued）
Projects
Accumulated
investment to budget
(%)
Completion
percentage
(%)
Accumulated
amount of
borrowing cost
capitalization
Amount of
borrowing cost
capitalization in
current period
Annual
capitalization
rate (%)
Fund source特力金钻交易大厦
(Teli Diamond
Trading Building)
19.45 19.45
Self-owned
fund / Bank
loan特力水贝珠宝大厦
地 下 连 通 工 程
(Underground
connection project
of telishuibei
jewelry building)
100.00 100
Self-owned
fund
421 厂房改造升级
项 目 (421 plant
renovation and
upgrading project)
100.00 100
Self-owned
fund
Total
5.14 Intangible assets
(1) Details on intangible assets
Items Land use right Trademarks Software Total
Cost
Opening balance 50661450.00 128500.00 1582145.00 52372095.00
Increase 2575109.20 2575109.20
1) Acquisition 2575109.20 2575109.20
Decrease
1) Transferred to investment
property
Closing balance 50661450.00 128500.00 4157254.20 54947204.20
Accumulated amortization
Opening balance 713015.84 89622.68 1008230.81 1810869.33
Increase 1077443.16 5349.96 425868.54 1508661.66
1) Accrual 1077443.16 5349.96 425868.54 1508661.66
Decrease
1) Transferred to investment
property
Closing balance 1790459.00 94972.64 1434099.35 3319530.99
Provision for impairment
Carrying amount
Closing balance 48870991.00 33527.36 2723154.85 51627673.21
Opening balance 49948434.16 38877.32 573914.19 50561225.67
(2) As of December 31 2020 the land use right with book value of
CNY 48870991.00 of the company has been mortgaged to Bank of
China as the mortgage of bank loan.
5.15 Deferred charges
Items
Opening
balance
Increase Amortization
Other
decreases
Closing
balance
Decoration
costs
13606805.49 20603423.42 3169898.43 325451.26 30714879.22
Total 13606805.49 20603423.42 3169898.43 325451.26 30714879.22
5.16 Deferred tax assets
(1) Deferred tax assets before offset
Items
Closing balance Opening balance
Deductible
temporary
difference
Deferred tax
asset
Deductible
temporary
difference
Deferred tax
asset
Provision for credit
impairment
33995288.38 8498822.10 34635849.55 8658962.39
Total 33995288.38 8498822.10 34635849.55 8658962.39
(2) Details of unrecognized deferred tax assets
Items Closing balance Opening balance
Deductible temporary difference 126380054.13 127244422.02
Deductible losses 27588656.95 19619056.75
Subtotal 153968711.08 146863478.77
(3) Maturity years of deductible losses of unrecognized deferred tax assets
Maturity years Closing balance Opening balance Remarks
Year 2020 505851.30
Year 2021 513356.86 1484364.61
Year 2022 4702701.91 4702701.91
Year 2023 5238151.51 5499309.62
Year 2024 7380279.17 7426829.31
Year 2025 9754167.50
Subtotal 27588656.95 19619056.75
5.17 Other non-current assets
Items 31 Dec 2020 31 Dec 2019
Prepayment for engineering equipment 49478268.29 6789167.54
VAT input tax to be certified 6415199.70
Others 100000.00 100000.00
Total 55993467.99 6889167.54
Other non current assets at the end of the period increased by 712.78% compared with that at the beginning of the period mainly due
to the payment of CNY 46757600.00 for the bundling construction of public facilities in project 02 and 03 of the upgrading and
reconstruction project of Tali Jimeng gold jewelry industrial park.
5.18 Accounts payable
(1) Details by nature
Items Closing balance Opening balance
Payment for goods and services 5130983.91 5671144.03
Payment for engineering equipment 71452182.62 63416286.39
Total 76583166.53 69087430.42
(2) Significant accounts payable with age over one year
Items Closing balance
Reasons for
unsettlement
深圳市英龙建安（集团）有限公司 29695887.90 The project has not
Items Closing balance
Reasons for
unsettlement
(Shenzhen Yinglong Jian’an (Group) Co. Ltd.?) been settled.深圳市特发地产有限公司
(Shenzhen SDG Real Estate Co. Ltd.*)
6054855.46
No repayment from
related company.深圳市易诺建设工程有限公司
(Shenzhen Yinuo Construction Engineering Co. Ltd.*)
4274022.22
The project has not
been settled.深圳瑞和建筑装饰股份有限公司
(Shenzhen Ruihe Construction Decoration Co. Ltd.*)
3621859.50
The project has not
been settled.Subtotal 43646625.08
5.19 Advance from customers
Items Closing balance Opening balance
Rent fee 2403580.47 491560.38
Loan 26808262.33
Total 2403580.47 27299822.71
The closing advances received decreased by 91.20% compared with the opening advances received mainly due to the fact that since
January 1 2020 the Company classified the advance payment received from the sale of goods and services as contract liabilities and
other current liabilities according to the new revenue criteria.
5.20 Contract Liability
Items Closing balance Opening balance
Item received in advance for goods 17833476.50
Item received in advance for services 1155151.63
Total 18988628.13
5.21 Employee benefits payable
(1) Employee benefits payable
Items Opening balance Increase Decrease Closing balance
Short-term employee
benefits
30503178.16 55756280.37 57893773.32 28365685.21
? The English names are for identification purpose only.Items Opening balance Increase Decrease Closing balance
Post-employment
benefits - defined
contribution plan
701616.73 390770.27 1092387.00
Termination benefits 1406957.63 1406957.63
Total 31204794.89 57554008.27 60393117.95 28365685.21
(2) Details of short-term employee benefits
Items Opening balance Increase Decrease Closing balance
Wage bonus allowance
and subsidy
28178495.98 49966130.85 49993755.23 28150871.60
Employee welfare fund 1059812.71 1059812.71
Social insurance
premium
8358.59 1630467.85 1638826.44
Including: Medicare
premium
7172.62 1466360.35 1473532.97
Occupational injuries
premium
513.72 2552.51 3066.23
Maternity premium 672.25 161554.99 162227.24
Housing provident fund 2041648.34 1850972.45 3892620.79
Trade union fund and
employee education
fund
274675.25 1248896.51 1308758.15 214813.61
Subtotal 30503178.16 55756280.37 57893773.32 28365685.21
(3) Details of defined contribution plan
Items Opening balance Increase Decrease Closing balance
Basic endowment
insurance premium
142418.85 376176.09 518594.94
Unemployment
insurance premium
1352.03 14594.18 15946.21
Company annuity
payment
557845.85 557845.85
Items Opening balance Increase Decrease Closing balance
Subtotal 701616.73 390770.27 1092387.00
5.22 Taxes and fees payable
Items Closing balance Opening balance
VAT 1003221.74 551626.76
Enterprise income tax 13891223.58 64461051.35
Individual income tax withheld for tax
authorities
281053.06 342986.08
Urban maintenance and construction tax 79176.17 134816.64
Land appreciation tax 5362682.64 5362682.64
Land use tax 26459.98 26459.98
Education surcharge 43391.83 82529.27
Local education surcharge 28927.88 55019.51
Stamp duty 346017.44 407829.34
Others 266.04
Total 21062154.32 71425267.61
The closing balance of tax payable should be reduced by 70.51% compared with the opening balance of tax payable mainly due to
the settlement of enterprise income tax in the previous year.
5.23 Other payables
(1) Details
Items Closing balance Opening balance
Interest payable
Dividend payable 46295.65
Other payable 158617678.97 101266802.49
Total 158663974.62 101266802.49
Other accounts payable at the end of the period increased by 56.63% compared with that at the beginning of the period mainly due to
the company's subsidiary Shenzhen Jinlu Industrial and Trading Co. Ltd. receiving the performance bond of CNY 50000000.00
paid by Hubei Hans’ Industry Investment Group Co. Ltd. see Note 13.2 Others for details.
(2) Dividend payables
Items 31 Dec 2020 31 Dec 2019
Dividends of common shares 46295.65
Total 46295.65
(3) Other payables
(a) Other payables listed by nature
Items 31 Dec 2020 31 Dec 2019
Deposit as security 37603031.07 29630854.41
Current accounts between related parties 76457197.82 28310337.10
Accruals 15300654.81 14218478.78
Temporary receipts payable 29256795.27 29107132.20
Total 158617678.97 101266802.49
(b) Other important accounts payable with an aging of more than one year at the end of the period
Items 31 Dec 2020
Reasons for non
repayment or carry
forward
深圳市特发集团有限公司(Shenzhen SDG
Group Co. Ltd.*)
17429247.94
No repayment from
related company
香港裕嘉投资有限公司(Hong Kong Yujia
Investment Co. Ltd. *)
2172091.54
No repayment from
related company
Total 2237573.19
5.24 Other Current Liability
Items 31 Dec 2020 31 Dec 2019
Items 31 Dec 2020 31 Dec 2019
Output VAT on pending 2237573.19
Total 2237573.19
Other current liabilities at the end of the period increased by CNY 2237573.19 compared with that at the beginning of the period
which is due to the fact that the company classified the value-added tax included in the advance receipts from sales of goods and
services as the output tax to be transferred as other current liabilities according to the new income standard from January 1 2020.
5.25 Long-term borrowings
(1) Categories on long-term borrowings
Items Closing balance Opening balance
Mortgaged borrowings 11171759.33
Less: Long-term borrowings due within 1
year
Total 11171759.33
(2) Remarks on Categories on long-term borrowings
The long-term borrowings at the end of the period are the fixed assets loan of the newly added Tellus Jinzuan Trading Building in the
current period with a loan term of 15 years.
5.26 Long-term payables
Items Closing balance Opening balance
Employee housing deposit 3908848.40 3908848.40
Appropriation for technical
innovation project
11311.96 11311.96
Total 3920160.36 3920160.36
5.27 Accrued liabilities
Items 31 Dec 2020 31 Dec 2019 Reasons for balance
Pending lawsuit 268414.80 2225468.76
Total 268414.80 2225468.76
The estimated liabilities at the end of the period decreased by 87.94% compared with that at the beginning of the period mainly due
to the adjustment of the estimated liabilities in accordance with the debt repayment amount determined by the court for pending
litigation in this year.
5.28 Deferred income
(1) Deferred income
Items
31 Dec
2019
Increase Decrease 31 Dec 2020 Reasons for balance
Government grants 139400.00 8297.62 131102.38
Government grants
related to assets
Total 139400.00 8297.62 131102.38
(2) Details of government grants
Items
31 Dec
2019
Increase
Grants included into
profit or loss/offsetting
relevant cost
31 Dec
2020
Related to
assets/income
Subsidy from Futian
District Old Elevator
Renovation Working
Group for elevator
renewal
139400.00 8297.62 131102.38
Related to
assets
Subtotal 139400.00 8297.62 131102.38
5.29 Share capital
Items 31 Dec 2019
Movements
31 Dec 2020Issue of
new shares
Bonus
shares
Reserve transferred
to shares
Others Subtotal
Total shares 431058320.00 431058320.00
5.30 Capital reserves
Items 31 Dec 2019 Increase Decrease 31 Dec 2020
Capital premium (Share
premium)
425768053.35 425768053.35
Items 31 Dec 2019 Increase Decrease 31 Dec 2020
Other capital reserve 5681501.16 5681501.16
Total 431449554.51 431449554.51
5.31 Other comprehensive income
Items
Opening
balance
Current period cumulative
31 Dec
2020
Current
period
cumulative
before
income tax
Less: OCI
carried
forward
transferred
to profit or
loss
Less: OCI
carried
forward
transferred
to retained
earnings
Less:
income
tax
Attributabl
e to parent
company
Attributabl
e to
non-control
ling
shareholder
s
Items to be
reclassified
subsequently to
profit or loss
26422.00 26422.00
Including: Other
comprehensive
income to be
transferred to profit
or loss under equity
method
26422.00 26422.00
Total 26422.00 26422.00
5.32 Surplus reserve
Items Opening balance Increase Decrease 31 Dec 2020
Statutory surplus reserve 21007488.73 2840996.89 23848485.62
Total 21007488.73 2840996.89 23848485.62
5.33 Retained earnings
Items
Current period
cumulative
Preceding period
comparative
Balance before adjustment at the end of preceding 387423510.78 184535322.70
Items
Current period
cumulative
Preceding period
comparative
period
Add: Increase due to adjustment (or less: decrease) 1079805.36
Opening balance after adjustment 387423510.78 185615128.06
Add: Net profit attributable to owners of the parent
company
57663828.89 219669708.47
Less: Appropriation of statutory surplus reserve 2840996.89 17861325.75
Ordinary share dividend payable 18104449.44
Closing balance 424141893.34 387423510.78
5.34 Operating revenue/Operating cost
Items
2020 2019
Revenue Costs of sales Revenue Costs of sales
Principal activities 416306597.14 316547493.71 561948296.72 428796930.66
Other activities 8112606.20 2713707.88 9124597.18 2224381.98
Total 424419203.34 319261201.59 571072893.90 431021312.64
(a) Revenue from principal activities (by industry or business)
Industry (business)
2020 2019
Revenue Costs of sales Revenue Costs of sales
Auto Sales 204928883.35 191680818.07 168551160.58 156655616.45
Auto Maintenance &
Inspection
41913088.24 32521898.98 46766020.98 39663299.92
Lease and Service 134609167.52 57587615.11 153247354.66 50778065.89
Jewelry Sales and Service 34855458.03 34757161.55 193383760.50 181699948.40
Total 416306597.14 316547493.71 561948296.72 428796930.66
(b) Revenue from principal activities (by sales model)
Model
2020 2019
Revenue Costs of sales Revenue Costs of sales
Model
2020 2019
Revenue Costs of sales Revenue Costs of sales
Direct Sales 416306597.14 316547493.71 561948296.72 428796930.66
Agent Sales
Total 416306597.14 316547493.71 561948296.72 428796930.66
(c) Revenue from principal activities (by region)
Region
2020 2019
Revenue Costs of sales Revenue Costs of sales
Shenzhen 399343292.94 300537120.26 368564536.22 246591834.40
Sichuan 16963304.20 16010373.45 188861996.63 177346699.15
Anhui 4521763.87 4858397.11
Total 416306597.14 316547493.71 561948296.72 428796930.66
(d) Revenue breakdown information
Items
2020
Auto Sales
Auto
Maintenance &
Inspection
Lease and
Service
Jewelry Sales
and Service
Total
By revenue
recognition time
Goods(transferred
at a certain point
of time)
204928883.35 41913088.24
34178602.47
281020574.06
Service(provided
within a certain
period of time)
134609167.52
676855.56
135286023.08
Total 204928883.35 41913088.24 134609167.52 34855458.03 416306597.14
5.35 Taxes and Surcharges
Items 2020 2019
City construction tax 588739.23 830132.08
Educational surcharge 236564.31 355770.92
Local educational surcharge 157709.54 237180.61
Resource tax 386763.32 764026.93
Property tax 2376613.48 3364402.93
Land use tax 352296.47 484217.61
Vehicle and vessel usage tax 5791.06 5244.16
Stamp duty 228084.61
Total 4104477.41 6269059.85
Note: Tax and surcharges of this year decreased by 34.53% compared with the previous year mainly due to the reduction of VAT
surcharges and the reduction of real estate tax.
5.36 Sales Expenses
Items 2020 2019
Employee benefits 8887537.69 14630038.53
Advertising promotion expense 2138496.21 1703759.37
Depreciation and amortization 2001011.81 2943208.89
Material consumption 1065923.75 1056542.05
Utility 65067.01 852678.19
Office expense 675305.56 617180.27
Business hospitality 331419.91 441467.35
Other 2550370.49 1711227.65
Total 17715132.43 23956102.30
5.37 General and Administrative Expenses
Items 2020 2019
Employee benefits 25671670.92 32664417.76
Consultation and service expenses 7196540.38 3880477.15
Depreciation and amortization 3107517.18 2022219.63
Office expenses 1574023.34 1536671.33
Items 2020 2019
Business hospitality expenses 280305.45 492374.20
Advertising promotion expenses 911387.33 490165.08
Travel expenses 127650.74 353362.25
Other 1115148.73 2228576.52
Total 39984244.07 43668263.92
5.38 Financial costs
Items 2020 2019
Interest Expenses 1042694.54 7000636.08
Less: interest income 4473218.76 2317143.23
Exchange gains and losses -132748.11 59540.03
Other 257388.65 239732.67
Total -3305883.68 4982765.55
Note: Financial expenses of this year decreased by 166.35% compared with the previous year mainly due to the year on year
decrease of interest expenses.
5.39 Other Income
Items 2020 2019 Related to assets /income
1. Government grant recognized in
other imcome
1522079.42 276907.09
Including: Government grant related
to deferred income (related to assets)
8297.62 Related to assets
Government grant directly
recognized in current profit or loss
1513781.80 276907.09 Related to income
2. Others related to daily operation
activities and recognized in other
income
44839.26 15990.23
Including: Charges of withholding
individual income tax
44839.26 9378.94
Input tax plus deduction 6611.29
Items 2020 2019 Related to assets /income
Total 1566918.68 292897.32
5.40 Investment Income
Items 2020 2019
Investment income from long-term equity investments
under equity method
14962411.52 19134325.91
Gains on disposal of long-term equity investments 1.00 210680848.23
Investment income from financial assets at fair value
through profit or loss during holding period
8495993.07 10207296.49
Including: financial assets measured at fair value with
changes included in current profits and losses
8495993.07 10207296.49
Investment in other equity instruments 547184.35
Total 23458405.59 240569654.98
Note: Investment income of this year decreased by 90.25% compared with the previous year mainly due to the impact of the
investment income generated from the disposal of long-term equity investment of Shenzhen Xinglong Machinery Mould Co. Ltd.last year.
5.41 Gains from Changes in Fair Values
Sources of gains on changes in fair value 2020 2019
Held-for-trading financial assets 316475.19 477394.67
Including: Changes in fair value of designated as
held-for-trading financial assets
316475.19 477394.67
Total 316475.19 477394.67
Note: The income from the change in fair value of this year decreased by 33.71% compared with the previous year mainly due to the
carry forward investment income from the income from the change in fair value of the held-for-trading financial assets at the
beginning of the year when it was recovered in the current year.
5.42 Impairment Loss of Credit
Items 2020 2019
Bad debt of notes receivable 934154.48 -272030.60
Items 2020 2019
Bad debt of other receivables 594593.53 1542510.68
Total 1528748.01 1270480.08
5.43 Impairment Loss of Asset
Items 2020 2019
Impairment of inventories -23818.95 -19028.39
Other impairment loss of assets -643261.62
Total -23818.95 -662290.01
Note: Asset impairment loss of this year decreased by 96.40% compared with the previous year mainly due to the impact of other
asset impairment losses withdrawn by Teli Xingguang Jinzun Company in the previous year.
5.44 Gains/ (losses) from Disposal of Assets
Items 2020 2019
Gains/(losses) from disposal of fixed assets construction in
progress productive biological assets and intangible assets
not classified as held for sale
216207.53
Including: Fixed assets 216207.53
Total 216207.53
Note:
5.45 Non-operating Income
Items 2020 2019
Recognized in current
extraordinary gains and
losses
Gains from damage and
retirement of non-current assets
2919.56 109998.46 109998.46
Gains from inability to pay the
proceeeds
497187.91 497187.91
Other 2789050.65 194622.17 2789050.65
Total 3289158.12 304620.63 3289158.12
The non-operating income in the current year increased by 979.76% compared with the previous year mainly due to the reduction of
estimated liabilities related to pending litigation.
5.46 Non-operating Expenses
Items 2020 2019
Recognized in current
extraordinary gains and losses
Loss from damage and
retirement of non-current assets
28814.21 214918.34 28814.21
Fines and expenses from breach
of contract
43127.49 834167.39 43127.49
Other 20810.00 20810.00
Total 92751.70 1049085.73 92751.70
Note: The non-operating expenses of this year decreased by 91.16% compared with the previous year mainly due to the impact of
early rent termination expenses Teli Xingguang Jinzun Company last year.
5.47 Income Tax Expenses
(a) Details of income tax expenses
Items 2020 2019
Current tax expenses 16683064.79 68071018.71
Deferred tax expenses 160140.29 15696124.32
Previous tax expenses -445268.53 20891.90
Total 16397936.55 83788034.93
Note: The income tax expense of this year decreased by 80.43% compared with the previous year mainly due to the impact of the
enterprise income tax accrued from the long-term equity investment of Shenzhen Xinglong Machinery Mould Co. Ltd. and the
deferred income tax related to the difference of equity investment recognized in the previous year's reversal.(b) Reconciliation of accounting profit and income tax expenses
Items 2020 2019
Profit before tax 76703166.46 302595269.11
Income tax expense at the statutory /applicable tax rate 19175791.62 75894191.34
Effect of different tax rate of subsidiaries -96771.41 -116827.10
Adjustments of impact from prior period income tax -445268.53 20891.90
Items 2020 2019
Long term equity investment income and equity
instrument investment income
-3740602.88 -4920377.57
Effect of non-deductible costs expenses or losses 409611.27 187968.31
Effect of previously unrecognized deductible losses
recognized as deferred tax assets
-372335.43 -1432355.39
Effect of deductible temporary differences and deductible
losses not recognized as deferred tax assets
2222449.90 14154543.44
Other (the impact of small low profit enterprises on the
reduction of taxable income and the expected balance of
liabilities at the end of the period)
-754937.99
Income tax expenses 16397936.55 83788034.93
5.48 Other Comprehensive Income
For details of net amount after tax of the other comprehensive income please refer to Note 5.31 Other Comprehensive Income for
details.
5.49 Notes to the Statement of Cash Flow
(a) Other cash received relating to operating activities
Items 2020 2019
Security deposit 7335328.03 28834845.75
Interest income 3015893.77 1521342.50
Government subsidies received 1513781.80 416307.09
Other income received 44839.26 9378.94
Current account and others 4209581.52 16979131.53
Total 16119424.38 47761005.81
(b) Other cash payments relating to operating activities
Items 2020 2019
Cash expenses 16559142.10 15604214.08
Security deposit 441713.29 20695465.01
Fines and expenses from breach of contract 63937.49 834167.39
Current account and others 436758.81 13905542.01
Total 17501551.69 51039388.49
(c) Other cash received relating to investing activities
Items 2020 2019
Performance bond for equity transfer
received
50000000.00
Related loan 2385849.54
Other 69962.11
Total 50069962.11 2385849.54
(d) Other cash payments relating to investing activities
Items 2020 2019
Service expenses for equity transfer paid 5000.00
Total 5000.00
(e) Other cash received relating to financing activities
Items 2020 2019
Loans from non-financial institutions 24800000.00 15020000.00
Total 24800000.00 15020000.00
(f) Other cash payments relating to financing activities
Items 2020 2019
Repayment of loans from non-financial
institution
24800000.00 22962000.00
Total 24800000.00 22962000.00
5.50 Supplementary Information to the Statement of Cash Flows
(a) Supplementary information to the statement of cash flows
Supplementary information 2020 2019
(i) Adjustments of net profit to cash flows
from operating activities:
Supplementary information 2020 2019
Net profit 60305229.91 218807234.18
Add: Provisions for impairment of assets 23818.95 -608190.07
Impairment Loss of Credit -1528748.01
Depreciation of fixed assets Investment
Properties oil and gas asset and productive
biological assets
27990380.00 26429872.30
Amortization of intangible assets 534789.66 229471.59
Amortization of long-term deferred
expenses
3169898.43 2898140.55
Losses /(gains as ‘-’) on disposal of fixed
assets intangible assets and other long-term
assets
25894.65 -216207.53
Losses /(gains as‘-’) on scrapping of fixed
assets
104919.88
Losses /(gains as ‘-’) on changes in fair
value
-316475.19 -477394.67
Finance costs /(income as ‘-’) -547378.56 7060176.11
Investment losses /(income as ‘-’) -23458405.59 -240569654.98
Decreases /(increases as ‘-’) in deferred
tax assets
160140.29 15696124.32
Increases /(decreases as‘-’) in deferred tax
liabilities
Decreases /(increases as‘-’) in inventories -713896.05 -9065776.82
Decreases /(increases as ‘-’) in operating
receivables
89142199.52 -24176109.62
Increases /(decreases as ‘-’) in operating
payables
-45682145.13 82798747.79
Others
Net cash flows from operating activities 109105302.88 78911353.03
(ii)Significant investing and financing
Supplementary information 2020 2019
activities not involving cash receipts and
payments:
Conversion of debt into capital
Convertible corporate bonds maturing
within one year
Fixed assets acquired under finance leases
(iii)Net increases in cash and cash
equivalents:
Cash at the end of the reporting period 208462656.63 400668257.81
Less: Cash at the beginning of the reporting
period
400668257.81 142848120.69
Add: Cash equivalents at the end of the
reporting period
Less: Cash equivalents at the beginning of
the reporting period
Net increase in cash and cash equivalents -192205601.18 257820137.12
(b) The components of cash and cash equivalents
Items 31 December 2020 31 December 2019
(i) Cash 208462656.63 400668257.81
Including: Cash on hand 20542.55 120351.17
Cash in bank available for
immediate use
208442114.08 400547906.64
Other monetary funds
available for immediate use
(ii) Cash equivalents
Including: Bond investments maturing
within three months
(iii) Cash and cash equivalents at the
end of the reporting period
208462656.63 400668257.81
Including: Restricted cash and cash
equivalents of the parent Company and
the subsidiaries of the group
5.51 Restricted Assets
Items Carrying amount at 31
December 2020
Reason
Cash and cash equivalents
29163042.30
Please refer to Note 5.1 for
details
Intangible assets 48870991.00 Bank loan mortgage
Total 78034033.30
5.52 Foreign Currency Monetary Items
(a) Foreign currency monetary items at 31 December 2020:
Items
Carrying amount at foreign
currency
Exchange rate
Carrying amount at
CNY
Cash and cash equivalents
Including: USD 856.00 6.5249 5585.31
HKD 21082.31 0.84164 17743.72
Total — 23329.03
5.53 Government Grants
(a) Government grants related to assets
Items Amount
Items presented
in the statement
of financial
position
Recognized in current profit or
loss or directly as deduct of
related cost
Presented items that
recognized in current
profit or loss or
directly as deduct of
related cost
2020 2019
Subsidy fund for elevator 131102.38 Deferred income 8297.62 Other income
Items Amount
Items presented
in the statement
of financial
position
Recognized in current profit or
loss or directly as deduct of
related cost
Presented items that
recognized in current
profit or loss or
directly as deduct of
related cost
2020 2019
renewal of old elevator
renewal and transformation
working group in Futian
District
(b) Government grants related to income
Items Amount
Items presented
in the statement
of financial
position
Recognized in current profit
or loss or directly as deduct
of related cost
Presented items that
recognized in current
profit or loss or
directly as deduct of
related cost
2020 2019
Shenzhen Luohu District
Bureau of industry and
information technology
transferred into support
fees for consumer activities
1156106.19 N/A 1156106.19 Other income
2019 Industrial support
funds
241700.00 N/A 241700.00 268700.00 Other income
Subsidies for enterprise
trial training in Luohu
District
76380.00 N/A 76380.00 Other income
Social Security Bureau
subsidy
29480.01 N/A 29480.01 8207.09 Other income
Subsidy for water & power
supply
10115.60 N/A 10115.60 Other income
Total 1513781.80 1513781.80 276907.09
Note 6. CHANGES IN THE SCOPE OF CONSOLIDATION
6.1 The Scope of Consolidation Increased
Name of the acquirees
Ways to
acquire the
equity interests
Date of
acquiring the
equity interests
Acquisition
costs
Interest
acquired (%)
Shenzhen jewelry
industry Service Co. Ltd
Newly establish July 2020 13000000.00 65.00
Note 7. INTERESTS IN OTHER ENTITIES
7.1 Interests in Subsidiaries
(a) Composition of corporate group
Name of subsidiary
Principal
place of
business
Registered
Address
Nature of
business
Percentage of equity
interests by the Company
(%)
Ways of
acquisitio
n
Direct Indirect深圳市特力新永通汽车发展
有 限 公 司 (Shenzhen Tellus
Xinyongtong Automobile
Development Co. Ltd.*)
Shenzhen Shenzhen Commercial 100.00 Set up深圳市宝安石泉实业有限公
司(Shenzhen Bao’an Shiquan
Industrial Co. Ltd.*)
Shenzhen Shenzhen Commercial 100.00 Set up深圳市特发特力房地产有限
公 司 (Shenzhen SDG Tellus
Real Estate Co. Ltd.*)
Shenzhen Shenzhen Manufacture 100.00 Set up深圳市特力创盈科技有限公
司 (Shenzhen Tellus
Chuangying Technology Co.
Ltd.*)
Shenzhen Shenzhen Commercial 100.00 Set up
深圳市新永通机动车检测设 Shenzhen Shenzhen Commercial 51.00 Set up
Name of subsidiary
Principal
place of
business
Registered
Address
Nature of
business
Percentage of equity
interests by the Company
(%)
Ways of
acquisitio
n
Direct Indirect
备 有 限 公 司 (Shenzhen
Xinyongtong Auto Vehicle
Inspection Equipment Co.Ltd.*)深圳市汽车工业贸易有限公
司 (Shenzhen Automobile
Industry and Trade Co. Ltd.*)
Shenzhen Shenzhen Commercial 100.00 Set up深圳市汽车工业供销公司
(Shenzhen Automobile
Industry Supply and
Marketing Co. Ltd.*)
Shenzhen Shenzhen Commercial 100.00 Set up深圳特发华日汽车企业有限
公 司 (Shenzhen SDG Huari
Automobile Enterprise Co.
Ltd.*)
Shenzhen Shenzhen Commercial 60.00 Set up深圳市华日安信汽车检测有
限 公 司 (Shenzhen Huari
Anxin Automobile Inspection
Co. Ltd.*)
Shenzhen Shenzhen Commercial 100.00 Set up深圳市中天实业有限公司
(Shenzhen Zhongtian
Industrial Co. Ltd.*)
Shenzhen Shenzhen Commercial 100.00 Set up深圳市华日丰田汽车销售服
务有限公司(Shenzhen Huari
Toyota Auto Sales Service
Co. Ltd.*)
Shenzhen Shenzhen Commercial 60.00 Set up安徽特力星光珠宝投资有限
公 司 (Anhui Tellus Seon
Hefei Hefei Commercial 51.00 Set up
Name of subsidiary
Principal
place of
business
Registered
Address
Nature of
business
Percentage of equity
interests by the Company
(%)
Ways of
acquisitio
n
Direct Indirect
Jewelry Investment Co.Ltd.*)安徽特力星光金尊珠宝有限
公 司 (Anhui Tellus Seon
Jinzun Jewelry Co. Ltd.*)
Hefei Hefei Commercial 60.00 Set up
四川特力珠宝科技有限公司
(Sichuan Tellus Jewelry
Technology Co. Ltd.*)
Chengdu Chengdu Commercial 66.67 Set up深圳市特力宝库供应链科技
有 限 公 司 (Shenzhen Tellus
Baoku Supply Chain
Technology Co. Ltd.*)
Shenzhen Shenzhen Commercial 100.00 Set up深圳珠宝产业服务有限公司
(Shenzhen Jewelry Industry
Service Co. Ltd.*)
Shenzhen Shenzhen Commercial 65.00 Set up
(b) Significant non-wholly owned subsidiaries
Name of subsidiary
Proportion of
ownership interest
held by non-
controlling interests
Profit or loss
attributable to non-
controlling
interests during the
reporting period
Dividends declared
to distribute to
non-controlling
interests during the
reporting period
Non-controlling
interests at the end of
thehe reporting period深圳市华日丰田汽车销售服
务有限公司 (Shenzhen Huari
Toyota Auto Sales Co. Ltd.*)
40.00 2429620.42 4108006.99深圳特发华日汽车企业有限
公 司 (Shenzhen Huari Toyota
Auto Sales Service Co. Ltd.*)
40.00 1253041.70 10954974.96
(c) Main financial information of significant non-wholly owned subsidiaries
Name of subsidiary
31 December 2020
Current assets
Non-current
assets
Total assets
Current
liabilities
Non-current
liabilities
Total
liabilities深圳市华日丰田汽车销售
服务有限公司 (Shenzhen
Huari Toyota Auto Sales
Co. Ltd.*)
67507256.67 6694509.17 74201765.84 63931748.36 63931748.36深圳特发华日汽车企业有
限 公 司 (Shenzhen Huari
Toyota Auto Sales Service
Co. Ltd.*)
52641986.30 22198318.35 74840304.65 47302867.25 47302867.25
(Continued)
Name of subsidiary
31 December 2019
Current assets
Non-current
assets
Total assets
Current
liabilities
Non-current
liabilities
Total
liabilities深圳市华日丰田汽车销售
服务有限公司 (Shenzhen
Huari Toyota Auto Sales
Co. Ltd.*)
66208279.12 4780912.24 70989191.36 66793224.94 66793224.94深圳特发华日汽车企业有
限 公 司 (Shenzhen Huari
Toyota Auto Sales Service
Co. Ltd.*)
48495244.11 24078718.09 72573962.20 48169129.04 48169129.04
Name of subsidiary
2020
Revenue Net profit/(loss)
Total
comprehensive
income
Net cash flows from
operating activities深圳市华日丰田汽车销售服
务有限公司(Shenzhen Huari
250984420.93 6074051.06 6074051.06 4948345.76
Name of subsidiary
2020
Revenue Net profit/(loss)
Total
comprehensive
income
Net cash flows from
operating activities
Toyota Auto Sales Co. Ltd.*)深圳特发华日汽车企业有限
公司(Shenzhen Huari Toyota
Auto Sales Service Co.
Ltd.*)
34313269.53 3132604.24 3132604.24 4440264.62
(Continued)
Name of subsidiary
2019
Revenue Net profit/(loss)
Total
comprehensive
income
Net cash flows
from operating
activities深圳市华日丰田汽车销
售 服 务 有 限 公 司
(Shenzhen Huari Toyota
Auto Sales Co. Ltd.*)
219302518.27 2099623.78 2099623.78 -1555308.78深圳特发华日汽车企业
有限公司(Shenzhen Huari
Toyota Auto Sales Service
Co. Ltd.*)
38745157.90 -3089360.18 -3089360.18 5401481.18
7.2 Interests in Joint Arrangements or Associates
(a) Significant joint ventures or associates
Company name
Principal place
of business
Registered
address
Nature of
business
Proportion of equity interests
by the Company (%)
Measurement
methods
Direct Indirect
Joint ventures深圳特力吉盟投资有
限 公 司 (Shenzhen
Tellus Jimeng
Shenzhen Shenzhen
Investment
in
industries
50.00
Accounting
by equity
method
Investment Co.Ltd.*)
Associates深圳市仁孚特力汽车
服 务 有 限 公 司
(Shenzhen Renfu
Tellus Automobiles
Service Co. Ltd.*)
Shenzhen Shenzhen
Mercedes
Benz sales
35.00
Accounting
by equity
method深圳东风汽车有限公
司 (Shenzhen
Dongfeng Automobile
Co. Ltd.*)
Shenzhen Shenzhen
Auto
manufactur
ing and
sales
25.00
Accounting
by equity
method
(b) Main financial information of the significant joint ventures
Items
31 Dec 2020/2020 31 Dec 2019/2019深圳特力吉盟投资有限公司
(Shenzhen Tellus Jimeng
Investment Co. Ltd.*)深圳特力吉盟投资有限公司
(Shenzhen Tellus Jimeng
Investment Co. Ltd.*)
Current assets 37797029.81 56022041.04
Including: Cash and cash
equivalents
34281101.96 9770310.11
Non-current assets 360906421.80 363958852.65
Total assets 398703451.61 419980893.69
Current liabilities 27947969.41 34420126.74
Non-current liabilities 295422000.00 245250000.00
Total liabilities 323369969.41 279670126.74
Non-controlling interests
Total owner’s equity attributable to
parent Company
75333482.20 140310766.95
Items
31 Dec 2020/2020 31 Dec 2019/2019深圳特力吉盟投资有限公司
(Shenzhen Tellus Jimeng
Investment Co. Ltd.*)深圳特力吉盟投资有限公司
(Shenzhen Tellus Jimeng
Investment Co. Ltd.*)
Share of net assets calculated at the
proportion of equity interests
37666741.13 70155383.48
Adjustment matters
—Goodwill
—Unrealized profit from intragroup
transaction
—Others
Carrying amount of investment in
the joint venture
37666741.13 70155383.48
Fair value of publicly quoted equity
investment in joint venture
Revenue 87082384.96 91769888.39
Finance expenses 15850179.92 14266181.96
Income tax expenses 6905938.48 5473045.83
Net profit/(loss) 21022715.25 16232739.76
Net profit from discontinued
operations
Other comprehensive income
Total comprehensive income 21022715.25 16232739.76
Dividends received from the joint
venture
8000000.00
(c) Main financial information of significant associates
Items
31 Dec 2020/2020 31 Dec 2019/2019深圳市仁孚特力汽车服务有限公
司(Shenzhen
Renfu Tellus
Automobiles
Service Co.Ltd.*)深圳东风汽车有限公司
(Shenzhen
Dongfeng
Automobile Co.
Ltd.*)深圳市仁孚特力汽车服务有限公
司(Shenzhen
Renfu Tellus
Automobiles
Service Co.Ltd.*)深圳东风汽车有限公司
(Shenzhen
Dongfeng
Automobile Co.
Ltd.*)
Current Assets 214297861.00 378483991.85 229415509.00 479352285.14
Non-current assets 23368404.54 172244888.77 22735996.00 214963230.31
Total assets 237666265.54 550728880.62 252151505.00 694315515.45
Current liabilities 141645848.00 344958726.39 156969413.00 459613457.00
Non-current liabilities - 65583477.43 66941248.16
Total liabilities 141645848.00 410542203.82 156969413.00 526554705.16
Non-controlling
interests
-14510815.59 -11589462.52
Total owner’s equity
attributable to parent
Company
96020417.54 154697492.39 95182092.00 179350272.81
Share of net assets
calculated at the
proportion of equity
interests
33607146.14 38674373.09 33313732.20 44837568.20
Adjustment matters
—Goodwill
— Unrealized profit
from intragroup
transaction
—Others
Items
31 Dec 2020/2020 31 Dec 2019/2019深圳市仁孚特力汽车服务有限公
司(Shenzhen
Renfu Tellus
Automobiles
Service Co.Ltd.*)深圳东风汽车有限公司
(Shenzhen
Dongfeng
Automobile Co.
Ltd.*)深圳市仁孚特力汽车服务有限公
司(Shenzhen
Renfu Tellus
Automobiles
Service Co.Ltd.*)深圳东风汽车有限公司
(Shenzhen
Dongfeng
Automobile Co.
Ltd.*)
Carrying amount of
investment in the
associate
33607146.14 38674373.09 33313732.20 44837568.20
Fair value of publicly
quoted equity
investment in
associate
Revenue 1247864433.00 399893712.73 1146987875.00 502282870.47
Net profit/(loss) 30838325.75 -26791281.02 30315168.00 18741639.29
Net profit from
discontinued
operations
Other comprehensive
income
Total comprehensive
income
30838325.75 -26791281.02 30315168.00 18741639.29
Dividends received
from the associate
10500000.00 17500000.00
(d) Summarized financial information about insignificant joint ventures and associates
31 December 2020/2020 31 December 2019/2019
Joint venture：
Total carrying amount of investments 12697424.88 11845452.17
The aggregate amount of below items
calculated based on proportion of equity
interests:
—Net profit/(loss) 1365105.69 855101.45
—Other comprehensive income
—Total comprehensive income 1365105.69 855101.45
Associate：
Total carrying amount of investments 995270.33 2026407.98
The aggregate amount of below items
calculated based on proportion of equity
interests:
—Net profit/(loss) -4655318.50 -15260873.57
—Other comprehensive income
—Total comprehensive income -4655318.50 -15260873.57
(e) Excess deficit in joint ventures or associates
Name of joint ventures or
associates
Cumulative
unrecognized loss
at 31 December
2019
Unrecognized profit in the
reporting period (or share of
net profit in the reporting
period)
Cumulative
unrecognized loss at 31
December 2020深圳特力汽车服务连锁有
限 公 司 (Shenzhen Tellus
Automobile Services Chain
Co. Ltd.*)
98865.26 98865.26
深圳市永通信达检测设备 916937.25 259275.48 1176212.73
Name of joint ventures or
associates
Cumulative
unrecognized loss
at 31 December
2019
Unrecognized profit in the
reporting period (or share of
net profit in the reporting
period)
Cumulative
unrecognized loss at 31
December 2020
有限 责任 公司 (Shenzhen
Yongtong Xinda Inspection
Equipment Co. Ltd.*)
Note 8. RISKS RELATED TO FINANCIAL INSTRUMENTS
Risks related to the financial instruments of the Company arise from the recognition of various financial assets and financial
liabilities during its operation including credit risk liquidity risk and market risk.Management of the Company is responsible for determining risk management objectives and policies related to financial instruments.Operational management is responsible for the daily risk management through functional departments (e.g. credit management
department of the Company reviews each credit sale). Internal audit department is responsible for the daily supervision of
implementation of the risk management policies and procedures and report their findings to the audit committee in a timely manner.Overall risk management objective of the Company is to establish risk management policies to minimize the risks without unduly
affecting the competitiveness and resilience of the Company.
8.1 Credit Risk
Credit risk is the risk of one party of the financial instrument face to a financial loss because the other party of the financial
instrument fails to fulfill its obligation. The credit risk of the Company is related to cash and equivalent notes receivable accounts
receivables other receivables and long-term receivables. Credit risk of these financial assets is derived from the counterparty’ s
breach of contract. The maximum risk exposure is equal to the carrying amount of these financial instruments.
Cash and cash equivalent of the Company has lower credit risk as they are mainly deposited in such financial institutions as
commercial bank of which the Company thinks with higher reputation and financial position.
For notes receivable other receivables and long-term receivables the Company establishes related policies to control their credit risk
exposure. The Company assesses credit capability of its customers and determines their credit terms based on their financial position
possibility of the guarantee from third party credit record and other factors (such as current market status etc.). The Company
monitors its customers’ credit record periodically and for those customers with poor credit record the Company will take measures
such as written call shortening or cancelling their credit terms so as to ensure the overall credit risk of the Company is controllable.(i) Determination of significant increases in credit risk
The Company assesses at each reporting date as to whether the credit risk on financial instruments has increased significantly since
initial recognition. When the Company determines whether the credit risk has increased significantly since initial recognition it
considers based on reasonable and supportable information that is available without undue cost or effort including quantitative and
qualitative analysis of historical information external credit ratings and forward-looking information. The Company determines the
changes in the risk of a default occurring over the expected life of the financial instrument through comparing the risk of a default
occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the
date of initial recognition based on individual financial instrument or a group of financial instruments with the similar credit risk
characteristics.When met one or more of the following quantitative or qualitative criteria the Company determines that the credit risk on financial
instruments has increased significantly: the quantitative criteria applied mainly because as at the reporting date the increase in the
probability of default occurring over the lifetime is more than a certain percentage since the initial recognition; the qualitative criteria
applied if the debtor has adverse changes in business and economic conditions early warning list of customer and etc.(ii) Definition of credit-impaired financial assets
The criteria adopted by the Company for determination of credit impairment are consistent with internal credit risk management
objectives of relevant financial instruments in considering both quantitative and qualitative indicators.When the Company assesses whether the debtor has incurred the credit impairment the main factors considered are as following:
Significant financial difficulty of the issuer or the borrower; a breach of contract e.g. default or past-due event; a lender having
granted a concession to the borrower for economic or contractual reasons relating to the borrower’ s financial difficulty that the
lender would not otherwise consider; the probability that the borrower will enter bankruptcy or other financial re-organisation; the
disappearance of an active market for the financial asset because of financial difficulties of the issuer or the borrower; the purchase or
origination of a financial asset at a deep discount that reflects the incurred credit losses.(iii) The parameter of expected credit loss measurement
The Company measures impairment provision for different assets with the expected credit loss of 12-month or the lifetime based on
whether there has been a significant increase in credit risk or credit impairment has occurred. The key parameters for expected credit
loss measurement include default probability default loss rate and default risk exposure. The Company sets up the model of default
probability default loss rate and default risk exposure in considering the quantitative analysis of historical statistics (such as
counterparties’ ratings guarantee method and collateral type repayment method etc.) and forward-looking information.Relevant definitions are as following:
Default probability refers to the probability of the debtor will fail to discharge the repayment obligation over the next 12 months or
the entire remaining lifetime;
Default loss rate refers to the Company's expectation of the loss degree of default risk exposure. The default loss rate varies
depending on the type of counterparty recourse method and priority and the collateral. The default loss rate is the percentage of the
risk exposure loss when default has occurred and it is calculated over the next 12 months or the entire lifetime;
The default risk exposure refers to the amount that the Company should be repaid when default has occurred in the next 12 months or
the entire lifetime. Both the assessment of significant increase in credit risk of forward-looking information and the calculation of
expected credit losses involve forward-looking information. Through historical data analysis the Company identifies key economic
indicators that have impact on the credit risk and expected credit losses for each business.The maximum exposure to credit risk of the Company is the carrying amount of each financial asset in the statement of financial
position. The Company does not provide any other guarantees that may expose the Company to credit risk.
8.2 Liquidity Risk
Liquidity risk is the risk of shortage of funds when fulfilling the obligation of settlement by delivering cash or other financial assets.The Company is responsible for the capital management of all of its subsidiaries including short-term investment of cash surplus and
dealing with forecasted cash demand by raising loans. The Company’s policy is to monitor the demand for short-term and long-term
floating capital and whether the requirement of loan contracts is satisfied so as to ensure to maintain adequate cash and cash
equivalents.
As at 31 December 2020 the maturity profile of the Company’s financial liabilities is as follows:
Items
31 December 2020
Within 6 months 1-2 years 2-3 years
Above 3
years
Accounts payable 76583166.53
Other payables 158617678.97
Long-term loans 469213.89 469213.89 774906.74 14207964.22
Long-term payables 3920160.36
Total 239590219.75 469213.89 774906.74 14207964.22
(Continued)
Items
31 December 2019
Within 6 months 1-2 years 2-3 years Above 3 years
Accounts payable 69087430.42
Other payables 101266802.49
Long-term payables 3920160.36
Total 174274393.27
8.3 Market Risk
(a) Foreign currency risk
Foreign currency risk is the risk arising from changes in fair value or future cash flows of financial instrument resulted from changes
in exchange rate. The Company is mainly operated in mainland China whose main activities are denominated in CNY hence the
Company bears insignificant market risk arising from foreign exchange changes.
Please refer to Note 5.52 Foreign Currency for details in foreign currency financial assets and liabilities on the balance sheet date.(b) Interest rate risk
Interest rate risk of the Company primarily arises from its long-term interest-bearing debts such as long-term loans and bonds
payables etc. Financial liabilities with floating interest rate make the Company subject to cash flow interest rate risk and financial
liabilities with fixed interest rate make the Company subject to fair value interest rate risk. The Company determines the relative
proportion of the fixed interest contracts and floating interest contracts based on the current market environment.
Finance department of the Company’s headquarter monitors interest rate of the group continuously. Increase of the interest rate will
result in the increase of the cost of new interest-bearing debts and the interest expense of the unpaid interest-bearing debts with
floating rate and subsequently lead to significant negative impact on the financial performance of the Company. The management
makes adjustment in accordance with the update market condition in a timely manner.Note 9. FAIR VALUE DISCLOSURES
The inputs used in the fair value measurement in its entirety are to be classified in the level of the hierarchy in which the lowest level
input that is significant to the measurement is classified.Level 1: Inputs consist of unadjusted quoted prices in active markets for identical assets or liabilities
Level 2: Inputs for the assets or liabilities (other than those included in Level 1) that are either directly or indirectly observable.Level 3: Inputs are unobservable inputs for the assets or liabilities
9.1 Assets and Liabilities Measured at Fair Value at 31 December 2020
Items
Fair value at 31 December 2020
Level 1 Level 2 Level 3 Total
Recurring fair value measurements
(a) Held-for-trading financial assets 314013869.86 314013869.86
(i) Financial assets designated as at
fair value through profit or loss
Items
Fair value at 31 December 2020
Level 1 Level 2 Level 3 Total
Structured deposits and financial
products
314013869.86 314013869.86
(b) Other equity instrument investment 10176617.20 10176617.20
Total assets measured at fair value on a
recurring basis
324190487.06 324190487.06
The fair value of financial instruments traded in an active market is based on quoted market prices at the reporting date. The fair
value of financial instruments not traded in an active market is determined by using valuation techniques. Specific valuation
techniques used to value the above financial instruments include discounted cash flow and market approach to comparable Company
model. Inputs in the valuation technique include risk-free interest rates benchmark interest rates exchange rates credit spreads
liquidity premiums discount for lack of liquidity.
9.2 Valuation Technique(s) Qualitative and Quantitative Information about the Significant Inputs Used for Fair Value
Measurement in Level 3 on a Recurring or Nonrecurring Basis
The trading financial assets are the structured deposits and financial products purchased. The future cash flow is predicted by the
expected rate of return and the unobservable estimate is the expected rate of return. As the business environment operation and
financial situation of the invested enterprise China Pudong Development Machinery Industry Co. Ltd. have not changed significantly
the Company measures the investment cost as a reasonable estimate of the fair value.Note 10. RELATED PARTIES AND RELATED PARTYTRANSACTIONS
Recognition of related parties: The Company has control or joint control of or exercise significant influence over another party; or
the Company is controlled or jointly controlled or significant influenced by another party.
10.1 General Information of the Parent Company
Name of the
parent
Registered
address
Nature of the business
Registered
capital
Percentage of
equity interests in
the Company (%)
Voting rights
in the
Company (%)
Shenzhen SDG
Group Co. Ltd.Shenzhen Real estate development
and management
3582.82 million 49.09 49.09
domestic business
(1) Remarks on the parent Company
Shenzhen SDG Group Co. Ltd. was invested by the State-owned Assets Supervision and Administration Commission of the People’
s Government of Shenzhen Municipal (the“Shenzhen SASAC”) and established on August 1 1981. Shenzhen SDG Group Co. Ltd.currently holds a business license with unified social credit code of 91440300192194195C with registered capital of CNY 3582.82
million.
(2) The Company’s ultimate controlling party is Shenzhen SASAC.
10.2 General Information of Subsidiaries
Details of the subsidiaries please refer to Notes 7 INTERESTS IN OTHER ENTITIES.
10.3 Joint Ventures and Associates of the Company
(a) General information of significant joint ventures and associates
Details of significant joint ventures and associates please refer to Notes 7 INTERESTS IN OTHER ENTITIES
(b) Details of other joint ventures or associates trading with or with
outstanding to the Company during the reporting period
Name Relationship with the Company
深 圳 市 新 永 通 汽 车 服 务 有 限 公 司 (Shenzhen
Xinyongtong Dongxiao Automobile Service Co. Ltd.*)
Associate
深圳市特力新永通汽车服务有限公司(Shenzhen Tellus
Xinyongtong Automobile Service Co. Ltd.*)
Associate
深圳市新永通东晓汽车服务有限公司 (Shenzhen
Xinyongtong Dongxiao Automobile Service Co. Ltd.*)
Associate originally transferred in current
period
深圳特力汽车服务连锁有限公司 (Shenzhen Tellus
Automobile Services Chain Co. Ltd.*)
Associate
深圳市永通信达检测设备有限责任公司 (Shenzhen
Yongtong Xinda Inspection Equipment Co. Ltd.*)
Associate
深圳市先导新材料有限公司(Shenzhen Xiandao New
Materials Co. Ltd.*)
Associate
深圳市特力行投资有限公司 (Shenzhen Tellus Xing
Investment Co. Ltd.*)
Joint venture
10.4 Other Related Parties of the Company
Name Relationship with the Company深圳市特发小额贷款有限公司
(Shenzhen SDG Microfinance Co. Ltd.*)
Holding subsidiary of the parent
Company深圳市特发天鹅实业公司
(Shenzhen SDG Swan Industrial Co. Ltd.*)
Holding subsidiary of the parent
Company深圳市机械设备进出口公司
(Shenzhen Machinery and Equipment Import and Export
Co. Ltd.*)
Holding subsidiary of the parent
Company深圳市特发地产有限公司
(Shenzhen SDG Real Estate Co. Ltd.*)
Holding subsidiary of the parent
Company香港裕嘉投资有限公司
(Hong Kong Yujia Investment Co. Ltd.*)
Holding subsidiary of the parent
Company深圳市特发工程管理有限责任公司
(Shenzhen SDG Engineering Management Co. Ltd.*)
Holding subsidiary of the parent
Company深圳市特力阳春房地产公司
(Shenzhen Tellus Yangchun Real Estate Co. Ltd.*)
Holding subsidiary of the parent
Company深圳龙岗特力房地产公司
(Shenzhen Longgang Tellus Real Estate Co. Ltd.*)
Holding subsidiary of the parent
Company深圳市特发特力物业管理有限公司
(Shenzhen SDG Tellus Property Management Co. Ltd.*)
Holding subsidiary of the parent
Company深圳市特发服务股份有限公司珠宝园分公司
(Shenzhen SDG Service Co. Ltd. Jewelry Park Branch*)
Holding subsidiary of the parent
Company安徽金尊珠宝有限公司
(Anhui Jinzun Jewelry Co. Ltd.*)
Participating shareholder汉成能源集团有限公司
(Hubei Han’s Industry Investment Co.Ltd.*)
Shareholder of significant associates
10.5 Related Party Transactions
(a) Purchases or sales of goods rendering or receiving of services
Purchases of goods receiving of services:
Related parties
Nature of the
transaction(s)
2020 2019深圳市特发工程管理有限责任公司
(Shenzhen SDG Engineering
Management Co. Ltd.*)
Receiving of services 838867.91 354705.66深圳市特发特力物业管理有限公司
(Shenzhen SDG Tellus Property
Management Co. Ltd.*)
Receiving of services 14396112.96 13609599.18深圳市特发服务股份有限公司珠宝
园分公司(Shenzhen SDG Service Co.Ltd. Jewelry Park Branch)
Receiving of services 1046227.65 336006.14
Sales of goods and rendering of services:
Related parties
Nature of the
transaction(s)
2020 2019
深圳 市特发小 额贷款 有限公 司
(Shenzhen SDG Microfinance Co.Ltd.*)
Rendering of services 161205.25 161205.24深圳市特发特力物业管理有限公司
(Shenzhen SDG Tellus Property
Management Co. Ltd.*)
Rendering of services 6868.14 4784.39
(b) Leases
The Company as lessor:
The lessee Type of assets leased 2020 2019深圳市仁孚特力汽车服务有限公司
(Shenzhen Renfu Tellus Automobiles
Service Co. Ltd.*)
House leasing 3857142.90 5047619.20深圳市新永通汽车服务有限公司
(Shenzhen Xinyongtong Automobile
Service Co. Ltd.*)
House leasing 527029.51 713410.48
深圳市新永通东晓汽车服务有限公 House leasing 173534.28 523285.74
司 (Shenzhen Xinyongtong Dongxiao
Automobile Service Co. Ltd.*)
深圳 市特发小 额贷款 有限公 司
(Shenzhen SDG Microfinance Co.Ltd.*)
House leasing 975808.45 1409263.84深圳市特发特力物业管理有限公司
(Shenzhen SDG Tellus Property
Management Co. Ltd.*)
House leasing 44754.54 56586.66深圳市特发服务股份有限公司珠宝
园分公司(Shenzhen SDG Service Co.Ltd. Jewelry Park Branch*)
House leasing 1801091.36 1014501.78
(c) Call loans between related parties
Related parties Amount Effective date Expiry date Notes
Borrowings深圳市特发集团有限公司
(Shenzhen SDG Group
Co. Ltd.*)
24800000.00 04/14/2020 05/14/2020 No interest汉成能源集团有限公司
(Hubei Han ’ s Industry
Investment Co.Ltd.*)
51000000.00 07/17/2020
CNY
1000000.00
interest payable
included
(d) Key management personnel compensation
Items 2020 2019
Key management personnel compensation 6954700.00 6583600.00
10.6 Receivables and Payables with Related Parties
(a) Receivables
Items Related parties
Closing balance Opening balance
Book balance
Provision for
bad debts
Book balance
Provision for
bad debts
Accounts 深圳市新永通汽车服务有 927602.00 927602.00 927602.00 927602.00
Items Related parties
Closing balance Opening balance
Book balance
Provision for
bad debts
Book balance
Provision for
bad debts
receivable 限公司(Shenzhen
Xinyongtong AutomobileService Co. Ltd.*）深圳市新永通东晓汽车服
务有限公司(Shenzhen
Xinyongtong Dongxiao
Automobile Service Co.
Ltd.*)
680400.00 680400.00深圳市特发小额贷款有限
公司(Shenzhen SDG
Microfinance Co. Ltd.*)
115481.80 1154.82 283583.81 2835.84
Subtotal 1043083.80 928756.82 1891585.81 1610837.84
Dividend
receivable深圳东风汽车有限公司
(Shenzhen Dongfeng
Automobile Co. Ltd.*)
24100548.07 39100548.07
Subtotal 24100548.07 39100548.07
Other receivables深圳特力汽车服务连锁有
限公司(Shenzhen Tellus
Automobile Services
Chain Co. Ltd.*)
1359297.00 1359297.00 1359297.00 1359297.00深圳市永通信达检测设备
有限责任公司(Shenzhen
Yongtong Xinda
Inspection Equipment Co.Ltd.*)
531882.24 531882.24 531882.24 531882.24深圳市先导新材料有限公
司(Shenzhen Xiandao New
Materials Co. Ltd.*)
660790.09 660790.09 660790.09 660790.09
深圳市特力新永通汽车服 114776.33 114776.33 114776.33 114776.33
Items Related parties
Closing balance Opening balance
Book balance
Provision for
bad debts
Book balance
Provision for
bad debts
务有限公司(Shenzhen
Tellus Xinyongtong
Automobile Service Co.
Ltd.*)深圳市特力行投资有限公
司(Shenzhen Tellus Xing
Investment Co. Ltd.*)
55125.04 551.25
Subtotal 2666745.66 2666745.66 2721870.70 2667296.91
Long-term
receivables深圳特力汽车服务连锁有
限公司(Shenzhen Tellus
Automobile Services
Chain Co. Ltd.*)
2179203.68 2179203.68 2179203.68 2179203.68
Subtotal 2179203.68 2179203.68 2179203.68 2179203.68
(b) Payables
Items Related parties Closing balance Opening balance
Accounts payable
深圳市特发地产有限公司(Shenzhen SDG
Real Estate Co. Ltd.*)
6054855.46 6054855.46
深圳市机械设备进出口公司(Shenzhen
Machinery and Equipment Import and Export
Co. Ltd.
45300.00 45300.00
深圳特力吉盟投资有限公司(Shenzhen
Tellus Jimeng Investment Co. Ltd.
200000.00 200000.00深圳市特发工程管理有限责任公司
(Shenzhen SDG Engineering Management
Co. Ltd.
12905.66 42205.66深圳市特发服务股份有限公司珠宝园分公
司(Shenzhen SDG Service Co. Ltd. Jewelry
Park Branch
36103.11
Items Related parties Closing balance Opening balance深圳市特发特力物业管理有限公司
(Shenzhen SDG Tellus Property Management
Co. Ltd.
2516323.68
Subtotal 8829384.80 6378464.23
Advance
Payment
深 圳市 仁 孚特 力 汽车 服 务有 限 公司
(Shenzhen Renfu Tellus Automobiles Service
Co. Ltd.
492095.20
Subtotal 492095.20
Other payables
香港裕嘉投资有限公司(Hong Kong Yujia
Investment Co. Ltd. *)
2172091.54 2172091.54
深圳市特发天鹅实业公司(Shenzhen SDG
Swan Industrial Co. Ltd. *)
20703.25 20703.25
深圳市机械设备进出口公司(Shenzhen
Machinery and Equipment Import and Export
Co. Ltd. *)
1554196.80 1554196.80
深圳市特发集团有限公司(Shenzhen SDG
Group Co. Ltd. *)
17429247.94 20378046.74
深圳龙岗特力房地产公司(Shenzhen
Longgang Tellus Real Estate Co. Ltd. *)
1095742.50 1095742.50
深圳市特力阳春房地产公司(Shenzhen
Tellus Yangchun Real Estate Co. Ltd. *)
476217.49 476217.49
深圳市特力行投资有限公司(Shenzhen
Tellus Xing Investment Co. Ltd. *)
122978.63深圳市永通信达检测设备有限责任公司
(Shenzhen Yongtong Xinda Inspection
Equipment Co. Ltd. *)
5600.00 29940.00
安徽金尊珠宝有限公司(Anhui Jinzun
Jewelry Co. Ltd. *)
1330000.00 1330000.00深圳市特发特力物业管理有限公司
(Shenzhen SDG Tellus Property Management
124550.87 192227.98
Items Related parties Closing balance Opening balance
Co. Ltd. *)深圳市特发服务股份有限公司珠宝园分公
司(Shenzhen SDG Service Co. Ltd. Jewelry
Park Branch)
6598.00深圳市仁孚特力汽车服务有限公司
(Shenzhen Renfu Tellus Automobiles Service
Co. Ltd. *)
833334.00 833334.00
深圳市特发小额贷款有限公司(Shenzhen
SDG Microfinance Co. Ltd. *)
227836.80 227836.80深圳市特发工程管理有限责任公司
(Shenzhen SDG Engineering Management
Co. Ltd. *)
58100.00
汉成能源集团有限公司(Hubei Han’s
Industry Investment Co.Ltd.*)
51000000.00
Subtotal 76457197.82 28310337.10
Note 11. COMMITMENTSAND CONTINGENCIES
11.1 Significant Commitments
(a) Capital commitments:
Capital commitments signed but not yet recognized in the
financial statements
31 December 2020 31 December 2019
Large contract 220523772.58
11.2 Contingencies
Significant contingencies existing at the balance sheet date:
In October 2005 the Company filed a lawsuit to the Shenzhen Luohu District People’s Court requesting 金田实业（集团）股份
有限公司 (Gintian Industry (Group) Co. Ltd. ? hereinafter referred to as “Gintian Company” ) to compensate its mandatory
deduction due to the guarantee provided for bank borrowings of Gintian Company. The total amount was CNY 4081830 including
? The English name is for identification purpose only.principal of CNY 3 million interests of CNY 1051380 litigation costs of CNY 25160 and execution costs of CNY 5290. The
court has decided in favor of the Company and the Company has applied for enforcement. The funds deducted in previous years
have been accounted for as losses.
In April 2006 深圳发展银行 (Shenzhen Development Bank Co. Ltd.*) filed a lawsuit against Gintian Company for overdue
repayment of USD 2 million and against the Company as the guarantor. After paying the principal of USD 2 million and interests
thereof on behalf of Gintian Company the Company filed an appeal to Shenzhen Luohu District People’s Court requesting Gintian
Company to repay fund of USD 2960490 and interests thereof. Through the mediation from Shenzhen Luohu District People’s
Court in 2008 a civil mediation agreement ((2008) Shen Luo Fa Min Yi Chu Zi No. 937) was issued and it was agreed that: Gintian
Company shall pay the Company USD 2960490 before October 31 2008 with interests exempted; if Gintian Company fails to
make payment on time it shall pay the liquidated damages for overdue payment based on the CNY benchmark loan interest rate
published by the People’s Bank of China for the same period.Gintian Company went through bankruptcy reorganization process. On January 29 2016 the Shenzhen Intermediate People’s Court
ruled that the reorganization plan of Gintian Company was completed and the bankruptcy process was terminated. Gintian Company
shall make additional allocations to creditors including the Company according to the reorganization plan and the Company should
obtain cash of CNY 325000 A shares of 427604 shares and B shares of 163886 shares of Gintian Company. As of the date of
approval for issuing this financial report the Company hasn’t received the allocated assets.The Company filed a lawsuit to Qianhai Cooperation District People’ s Court on August 15 2018 after repeatedly failed to
communicate with Jintian Company about the cash and equity that should be distributed to the Company after the bankruptcy and
reorganization of Jintian Company. The court ordered on February 13 2020 ((2018) Yue 0391 minchu No. 3104 civil judgment)
Jintian Company to pay CNY 325000 to the Company within five days after the judgment came into force and 427604 A shares and
163886 B shares of Jintian Company (if the shares can not be delivered they can be paid after being converted into cash according to
the stock market price on the last day of the performance period). On January 7 2021 the Company applied for compulsory
execution by Qianhai Cooperation District People’s Court. As of the approval date of this financial report the Company has not
received the execution payment.Note 12. EVENTS AFTER THE REPORTING PERIOD
12.1 Profit Distribution
According to the profit distribution plan for 2020 approved by the 10th formal meeting of the ninth board of directors on April 15
2021 the Company plans to distribute cash dividend of CNY 0.06 (tax included) to all shareholders for every 10 shares with
431058320 total shares as the base as of December 31 2020 and a total of CNY 2586349.92 in cash without bonus shares or
capital reserve. The above profit distribution plan has yet to be reviewed and approved by the general meeting of shareholders of the
Company.
12.2 Description of other events after the balance sheet dateOn January 14 2021 the 19th interim meeting of the ninth board of directors of the Company deliberated and passed “Proposal onliquidation and cancellation of a holding subsidiary Sichuan Teli jewelry Technology Co. Ltd.” and authorized the management to
handle matters related to liquidation and cancellation in accordance with legal procedures.
As of April 15 2021 (the report date approved by the board of directors) the Company has no other events after the balance sheet
date that should be disclosed.Note 13. OTHER SIGNIFICANTMATTERS
13.1 Segment Information
(a) Basis of identification and accounting policies of reportable segments
Reportable segments are identified based on operating segments which are determined based on the structure of the Company’ s
internal organization management requirements and internal reporting system. The Company identified reportable segments based
on industry. Business performance of auto sales vehicle maintenance and inspection leasing and services and wholesale and retail
of jewelry were evaluated separately. Assets and liabilities shared by different segments are allocated between segments
proportionate to their respective size.(b) Financial information of reportable segments
Items Auto sales
Vehicle
maintenance
and inspection
Leasing and
services
Sales and
service of
jewelry
Inter-segment
offsetting
Total
Revenue
from main
operations
204928883.35 72248549.73 143987615.85 34855458.03 -39713909.82 416306597.14
Cost of
main
operations
191680818.07 62855217.99 66296404.54 35405982.74 -39690929.63 316547493.71
Total assets 43853056.13 112658122.35
2824685628.7
8
67046534.86 -1339801040.97
1708442301.1
5
Total
liabilities
44109734.73 74794120.79 744795208.68 7442184.42 -547345049.28 323796199.34
13.2 OthersOn July 17 2020 the 17th interim meeting of the ninth board of directors of the company deliberated and passed “Proposal onsigning the agreement of intent between the subsidiary and Hubei Hans’Industry Investment Co. Ltd.”According to the agreement
signed on the same day between the company's subsidiary Shenzhen Automobile Industry and Trade Co. Ltd. (Party A) and Hubei
Hans’ Industry Investment Co. Ltd. (Party B) Party B undertakes to participate in the project of Party A's plan to sell 25% equity of
Shenzhen Dongfeng Motor Co. Ltd. through Shanghai United Property Exchange in accordance with the law and regulations and
transfer the target equity with the price that is not less than 1 / 2 of the transaction price of 50% equity of Shenzhen Dongfeng
Motor Co. Ltd. sold by Dongfeng special Commercial Vehicle Co. Ltd. transferred by Party B and is not less than the evaluation
made by the third-party intermediary selected or recognized by Party A. Party B shall pay a performance bond of CNY 50000000.00
to Party A and the interest of the bond shall be calculated according to the agreement. Shenzhen Automobile Industry and Trade Co.Ltd. has received the performance bond of CNY 50000000.00 from Hubei Hans’ Industry Investment Co. Ltd. in July 2020. As of
December 31 2020 the accrued interest of the bond is CNY 1000000.00. Up to now Shenzhen Automobile Industry and Trade Co.
Ltd. has not been publicly listed to sell the above shares.Note 14. NOTES TO THE MAIN ITEMS OF THE FINANCIAL STATEMENTS OF THE PARENT COMPANY
14.1 Accounts Receivable
(1) Age analysis
Ages Dec 31 2020 Dec 31 2019
Within 1 year 248723.43 208798.75
1 – 2 years 3360.00
2 – 3 years
Over 3 years 484803.08 484803.08
Subtotal 736886.51 693601.83
Less: provision for bad debts 487458.31 486891.07
Total 249428.20 206710.76
(2) Details on categories
Categories
Closing balance
Book balance Provision for bad debts
Carrying
amountAmount % to total Amount
Provision
proportion (%)
Receivables with
provision made on an
individual basis
484803.08 65.79 484803.08 100.00 0.00
Categories
Closing balance
Book balance Provision for bad debts
Carrying
amountAmount % to total Amount
Provision
proportion (%)
Receivables with
provision made on a
collective basis
252083.43 34.21 2655.23 1.05 249428.20
Total 252083.43 34.21 2655.23 1.05 249428.20
(Continued)
Categories
Opening balance
Book balance Provision for bad debts
Carrying
amountAmount % to total Amount
Provision
proportion (%)
Receivables with
provision made on an
individual basis
484803.08 69.90 484803.08 100.00
Receivables with
provision made on a
collective basis
208798.75 30.10 2087.99 1.00 206710.76
Total 693601.83 100.00 486891.07 70.20 206710.76
a) Accounts receivable with provision made on an individual basis
Debtors Book balance
Provision for
bad debts
Provision
proportion (%)
Reasons for
provision made深圳笔架山娱乐公司
(Shenzhen Bijiashan
Entertainment Company?)
172000.00 172000.00 100.00
Expected to be
unrecoverable due
to long ages龚炎清
(Gong Yanqing)
97806.64 97806.64 100.00
Expected to be
unrecoverable due
to long ages广州乐敏电脑中心
(Guangzhou Lemin
86940.00 86940.00 100.00
Expected to be
unrecoverable due
? The English names are for identification purpose only.Debtors Book balance
Provision for
bad debts
Provision
proportion (%)
Reasons for
provision made
Computer Center*) to long ages
Others 128056.44 128056.44 100.00
Expected to be
unrecoverable due
to long ages
Subtotal 484803.08 484803.08 100.00
b) Accounts receivable with provision for bad debts made on a collective basis
Ages
Dec 31 2020
Book balance
Provision for bad
debts
Provision proportion
(%)
Within 1 year 248723.43 2487.23 1.00
1 – 2 Years 3360.00 168.00 5.00
Subtotal 252083.43 2655.23 1.05
(continued)
Ages
Dec 31 2019
Book balance
Provision for bad
debts
Provision proportion
(%)
Within 1 year 208798.75 2087.99 1.00
Subtotal 208798.75 2087.99 1.00
(3) Changes in provision for bad debts
Items
Opening
balance
Increase Decrease
Closing
balanceAccrual Recovery Others Reversal
Written-
off
Others
Receivables with
provision made
on an individual
basis
484803.08 484803.08
Items
Opening
balance
Increase Decrease
Closing
balanceAccrual Recovery Others Reversal
Written-
off
Others
Receivables with
provision made
on a collective
basis
2087.99 567.24 2655.23
Subtotal 486891.07 567.24 487458.31
(4) Details of the top 5 debtors with largest balances
Debtors Book balance
Proportion to the total
balance of accounts
receivable (%)
Provision for bad
debts深圳市金城银域珠宝首饰有限公司
(Shenzhen Jincheng Yinyu Jewelry
Co. Ltd.?)
248723.43 33.75 2487.23
深 圳 笔 架 山 娱 乐 公 司 (Shenzhen
Bijiashan Entertainment Company)
172000.00 23.34 172000.00
龚炎清(Gong Yanqing) 97806.64 13.27 97806.64
广州乐敏电脑中心(Guangzhou Lemin
Computer Center)
86940.00 11.80 86940.00
兰 州 大 船 电 子 公 司 (Lanzhou
Dachuan Electronics Co. Ltd.*)
37308.00 5.06 37308.00
Subtotal 642778.07 87.22 396541.87
14.2 Other Receivables
(1) Details by category
Items Closing balance Opening balance
Interest receivable
? The English names are for identification purpose only.Items Closing balance Opening balance
Dividend receivable 547184.35 547184.35
Other receivables 126422912.78 115490588.74
Total 126970097.13 116037773.09
(2) Dividend receivable
(a) Details
Items Closing balance Opening balance
China Perfect Machinery Industry Corp. Ltd. 547184.35 547184.35
Total 547184.35 547184.35
(b) Dividend receivable over 1 year
Items Closing balance Ages Reasons Notes
China Perfect Machinery
Industry Corp. Ltd.
547184.35 1 – 2 years not yet paid No impairment
Total 547184.35
(3) Other receivables
(a)Other receivables categorized by ages
Ages Closing Balance Opening Balance
Within 1 year 126378704.11 115387153.52
1 – 2 years 46698.00
2 – 3 years
Over 3 years 13588345.66 14334831.39
Subtotal 140013747.77 129721984.91
Less: provision for bad debts 13590834.99 14231396.17
Total 126422912.78 115490588.74
(b) Other receivables categorized by nature
Nature of receivables Closing balance Opening balance
Temporary advance payment receivable 13650486.51 14450215.85
Related transactions within the consolidation
scope
126363261.26 115271769.06
Total 140013747.77 129721984.91
(c) Other receivables categorized by methods of provision for bad debts
A. As of 2020-12-31 provision for bad debts according to the model of phase I/II/III:
Phase Closing balance Provision for bad debts Opening balance
I 126425402.11 2489.33 126422912.78
II
III 13588345.66 13588345.66
Total 140013747.77 13590834.99 126422912.78
As of 2020-12-31 provision for bad debts at phase I:
Catagories Book Balance
Provision
proportion (%)
Provision
for bad
debts
Carrying
Amount
Reasons for
provision made
Receivables with provision
made on an individual basis
Receivables with provision
made on a collective basis
126425402.11 0.00 2489.33 126422912.78
3. P
ortfolio grouped with ages
62140.85 4.01 2489.33 59651.52
no dramatic
credit risk
change after
confirmed
4. P
ortfolio grouped with
balances due from
126363261.26 126363261.26
no dramatic
credit risk
change after
Catagories Book Balance
Provision
proportion (%)
Provision
for bad
debts
Carrying
Amount
Reasons for
provision made
consolidated parties confirmed
Total 126425402.11 4.01 2489.33 126422912.78
As of 2020-12-31 provision for bad debts at phase III:
Catagories Book Balance
Provision
proportion (%)
Provision for
bad debts
Carrying
Amount
Reasons for
provision made
Receivables with provision
made on an individual basis
13588345.66 100.00 13588345.66
credit risk
change
dramatically
after confirmed
Total 13588345.66 100.00 13588345.66
B. As of 2019-12-31 provision for bad debts according to the model of phase I/II/III:
Phase Closing balance Provision for bad debts Opening balance
I 115596331.65 105742.91 115490588.74
II
III 14125653.26 14125653.26
Total 129721984.91 14231396.17 115490588.74
As of 2019-12-31 provision for bad debts at phase I:
Catagories Book Balance
Provision
proportion (%)
Provision for
bad debts
Carrying Amount
Reasons for
provision made
Receivables with
provision made on an
individual basis
Receivables with 115596331.65 0.09 105742.91 115490588.74
Catagories Book Balance
Provision
proportion (%)
Provision for
bad debts
Carrying Amount
Reasons for
provision made
provision made on a
collective basis
3. P
ortfolio grouped
with ages
324562.59 32.58 105742.91 218819.68
no dramatic
credit risk
change after
confirmed
4. P
ortfolio grouped
with balances due
from consolidated
parties
115271769.06 115271769.06
Total 115596331.65 0.09 105742.91 115490588.74
As of 2019-12-31 provision for bad debts at phase III:
Catagories Book Balance
Provision
proportion (%)
Provision for
bad debts
Carrying Amount
Reasons for
provision made
Receivables with
provision made on an
individual basis
14125653.26 100.00 14125653.26
credit risk
change
dramatically
after confirmed
Total 14125653.26 100.00 14125653.26
As of 2020-12-31 other receivables with provision made on an individual basis
Debtors Book balance Provision for bad debts Provision proportion (%)
Shenzhen Zhonghao
(Group) Co. Ltd.
5000000.00 5000000.00 100.00
Jinbeili Household
Appliances Co. Ltd.
2706983.51 2706983.51 100.00
Shenzhen Petrochemical
(Group) Co. Ltd.
1903819.59 1903819.59 100.00
Shenzhen SDG Huatong 1212373.79 1212373.79 100.00
Debtors Book balance Provision for bad debts Provision proportion (%)
Packaging Co. Ltd.Shenzhen Xiandao New
Materials Co. Ltd.
660790.09 660790.09 100.00
Others 2104378.68 2104378.68 100.00
Total 13588345.66 13588345.66 100.00
As of 2020-12-31 other receivables with provision made on an collective basis
Catagories Book Balance Provision proportion (%) Provision for bad debts
3. P
ortfolio grouped with
ages
62140.85 2489.33 4.01
Including: Within 1 year 15442.85 154.43 1.00
1 – 2 years 46698.00 2334.90 5.00
2 – 3 years
Over 3 years
4. P
ortfolio grouped with
balances due from
consolidated parties
126363261.26
Total 126425402.11 2489.33 0.00
As of 2019-12-31 other receivables with provision made on an collective basis
Catagories Book Balance Provision proportion (%) Provision for bad debts
5. P
ortfolio grouped with
ages
324562.59 105742.91 32.58
Including: Within 1 year 115384.46 1153.84 1.00
1 – 2 years
2 – 3 years
Over 3 years 209178.13 104589.07 50.00
Catagories Book Balance Provision proportion (%) Provision for bad debts
6. P
ortfolio grouped with
balances due from
consolidated parties
115271769.06
Total 115596331.65 105742.91 0.09
(d) Changes in provision for bad debts
Items
Phase I Phase II Phase III
Total
12?month
expected credit
losses
Lifetime expected
credit losses (credit
not impaired)
Lifetime expected
credit losses (credit
impaired)
Opening balance 115596331.65 14125653.26 129721984.91
Opening balance in current
period
--Transferred to phase II
--Transferred to phase III
--Reversed to phase II
--Reversed to phase I
Provision made in current
period
10829070.46 -44236.71 10784833.75
Provision recovered in current
period
493070.89 493070.89
Provision reversed in current
period
Provision written-off in current
period
Other changes
Items
Phase I Phase II Phase III
Total
12?month
expected credit
losses
Lifetime expected
credit losses (credit
not impaired)
Lifetime expected
credit losses (credit
impaired)
Closing balance 126425402.11 13588345.66 140013747.77
(e) Details of the top 5 debtors with largest balances
Debtors
Nature of
receivables
Book balance Ages
Proportion to the
total balance of other
receivables (%)
Provision for
bad debts
Shenzhen Zhongtian
Industrial Co. Ltd.Internal
accounts
124943380.53 Within 1 year 89.24
Shenzhen Zhonghao
(Group) Co. Ltd.
Current
accounts
5000000.00 Over 5 years 3.57 5000000.00
Jinbeili Household
Appliances Co. Ltd.
Current
accounts
2706983.51 Over 5 years 1.93 2706983.51
Shenzhen Petrochemical
(Group) Co. Ltd.
Current
accounts
1903819.59 Over 5 years 1.36 1903819.59
Shenzhen SDG Huatong
Packaging Co. Ltd.
Current
accounts
1212373.79 Over 5 years 0.87 1212373.79
Subtotal
135766557.42
96.97
10823176.89
14.3 Long-term Equity Investments
(1) Categories
Items
Closing balance Opening balance
Book balance
Provision for
impairment
Carrying amount Book balance
Provision for
impairment
Carrying amount
Investm
ents in
subsidia
ries
799743472.73 6954000.00 792789472.73 745996472.73 1956000.00 744040472.73
Items
Closing balance Opening balance
Book balance
Provision for
impairment
Carrying amount Book balance
Provision for
impairment
Carrying amount
Investm
ents in
associat
es and
joint
ventures
93758474.47 9787162.32 83971312.15 125101730.19 9787162.32 115314567.87
Total 893501947.20 16741162.32 876760784.88 871098202.92 11743162.32 859355040.60
(2) Investments in subsidiaries
Investees
Opening
balance
Increase Decrease Closing balance
Provision for
impairment
made in
current period
Closing
balance of
provision for
impairment
Shenzhen SDG
Tellus Real Estate
Co. Ltd.
31152888.87 31152888.87
Shenzhen Tellus
Chuangying
Technology Co.Ltd.
14000000.00 14000000.00
Shenzhen Tellus
Xinyongtong
Automobile
Development Co.
Ltd.
57672885.22 57672885.22
Shenzhen Zhongtian
Industrial Co. Ltd.
369680522.90 369680522.90
Shenzhen
Automobile
126251071.57 126251071.57
Investees
Opening
balance
Increase Decrease Closing balance
Provision for
impairment
made in
current period
Closing
balance of
provision for
impairment
Industry and Trade
Co. Ltd.
Shenzhen SDG
Huari Automobile
Enterprise Co. Ltd.
19224692.65 19224692.65
Shenzhen Huari
Toyota Auto Sales
Service Co. Ltd.
1807411.52 1807411.52
Shenzhen
Xinyongtong Auto
Vehicle Inspection
Equipment Co. Ltd.
10000000.00 10000000.00
Anhui Tellus Seon
Jewelry Investment
Co. Ltd.
4998000.00
4998000.0
0
4998000.0
0
4998000.00
Sichuan Tellus
Jewelry Technology
Co. Ltd.
100000000.00 100000000.00
Shenzhen Tellus
Baoku Supply
Chain Technology
Co. Ltd.
9253000.00 40747000.00 50000000.00
Shenzhen Haneco
Technologies
Ceramics Co. Ltd.
1956000.00
Shenzhen Jewelry
Industry Service
Co. Ltd
13000000.00 13000000.00
Subtotal 744040472.73 53747000.00 4998000.0 792789472.73 4998000.0 6954000.00
Investees
Opening
balance
Increase Decrease Closing balance
Provision for
impairment
made in
current period
Closing
balance of
provision for
impairment
0 0
Note: As the Company decided to liquidate Anhui Tellus Seon Jewelry Investment Co. Ltd. the impairment provision for book
long-term equity investment was CNY 4998000.00. See Note 12 EVENTS AFTER THE REPORTING PERIOD to for details.
(3) Investments in associates and joint ventures
Investees Opening balance
Increase/Decrease
Investments
increased
Investments
decreased
Investment
income
recognized under
equity method
Adjustment in other
comprehensive
income
Joint ventures
Shenzhen Tellus Jimeng
Investment Co. Ltd.
70155383.50 35000000.00 10511357.63
Shenzhen Tellus Xing
Investment Co. Ltd.
11845452.17 851972.71
Subtotal 82000835.67 35000000.00 11363330.34
Associates
Shenzhen Renfu Tellus
Automobiles Service
Co. Ltd.
33313732.20 10793413.94
Hunan Changyang
Industrial Co. Ltd.Shenzhen Jiecheng
Electronic Co. Ltd.
Shenzhen Xiandao New
Materials Co. Ltd.Subtotal 33313732.20 10793413.94
Total 115314567.87 35000000.00 22156744.28
(Continued)
Investees
Increase/Decrease
Closing balance
Closing balance
of provision for
impairment
Changes in
other equity
Cash dividend/profit
declared for
distribution
Provision for
impairment
Others
Joint ventures
Shenzhen Tellus
Jimeng Investment
Co. Ltd.
8000000.00 37666741.13
Shenzhen Tellus Xing
Investment Co. Ltd.
12697424.88
Subtotal 8000000.00 50364166.01
Associates
Shenzhen Renfu Tellus
Automobile Service
Co. Ltd.
10500000.00 33607146.14
Hunan Changyang
Industrial Co. Ltd.
1810540.70
Shenzhen Jiecheng
Electronic Co. Ltd.
3225000.00
Shenzhen Xiandao
New Materials Co.Ltd.
4751621.62
Subtotal 10500000.00 33607146.14 9787162.32
Total 18500000.00 83971312.15 9787162.32
14.4 Operating revenue/Operating cost
Items
Current period cumulative Preceding period comparative
Revenue Cost Revenue Cost
Main operations 37241063.15 10754749.28 38042399.39 3772642.43
Total 37241063.15 10754749.28 38042399.39 3772642.43
14.5 Investment Income
Items
Current period
cumulative
Preceding period
comparative
8400304.32
Investment income from long-term equity
investments under equity method
22156744.28 19318549.22
Gains on disposal of long-term equity
investments
210680848.23
Investment income from financial
instruments
3270243.48 6004427.88
Including: Financial assets classified as at
fair value through profit or loss
3270243.48 6004427.88
Other equity instrument investments 547184.35
Investment income from available-for-sale
financial assets
Total 33827292.08 236551009.68
Note 15. Other SUPPLEMENTARY INFORMATION
15.1 Non-recurring profit or loss
1. Schedule of non-recurring profit or loss of current period
Items Amount Remarks
Gains on disposal of non-current assets including written-off
of provision for impairment
1.00
Tax refund credit or exemption approved beyond the power
of authorities without formal documents or with
occasionality
Government grant included in profit or loss (excluding those
closely related to operating activities or regular
government grants)
1522079.42
Fund possession charge from non-financial entities and 435887.15
Items Amount Remarks
included in profit or loss
Gains on acquisition of subsidiaries joint ventures and
associates due to the surplus of acquisition-date fair value
of net identifiable assets in acquiree over the acquisition
cost
Gains on non-cash assets exchange
Gains on assets consigned to the third party for investment or
management
Assets impairment loss incurred due to force majeure such as
natural disasters
Gains on debt restructuring
Entity restructuring expenses such as staffing and
integrating expenses
Gains on transactions with unfair value
Net profit gains on subsidiaries acquired through business
combination under common control from the beginning of
the period to the combination date
Contingent gains on non-operating activities
Gains on changes in fair value of held-for-trading financial
assets and liabilities and investment income from disposal
of held-for-trading financial assets and liabilities and
available-for-sale financial assets excluding those arising
from hedging business related to operating activities
8812468.26
The reversed provision for impairment of receivables based
on impairment testing on an individual basis
493295.33
Gains on designated loans
Gains on changes in fair value of investment properties with
subsequent measurement at the fair value mode
Items Amount Remarks
Gains on reconciliation of current period profit or loss
following legal and regulative requirements
Management charges for consigned operations
Other non-operating revenue or expenditures 3196406.42
Other profit or loss satisfying the definition of non-recurring
profit or loss
44839.26
Subtotal 14504976.84
Less: Enterprise income tax affected 3123780.55
Non-controlling interest affected (after tax) 1437257.12
Net non-recurring profit or loss attributable to shareholders
of the parent company
9943939.17
15.2 RONA and EPS
1. 2020
Profit of the reporting period
Weighted average
RONA (%)
EPS (yuan/share)
Basic EPS Diluted EPS
Net profit attributable to shareholders of
ordinary shares
4.48 0.13 0.13
Net profit attributable to shareholders of
ordinary shares after deducting
non-recurring profit or loss
3.71 0.11 0.11
2. 2019
Profit of the reporting period
Weighted average
RONA (%)
EPS (yuan/share)
Basic EPS Diluted EPS
Net profit attributable to shareholders of
ordinary shares
18.92 0.51 0.51
Profit of the reporting period
Weighted average
RONA (%)
EPS (yuan/share)
Basic EPS Diluted EPS
Net profit attributable to shareholders of
ordinary shares after deducting
non-recurring profit or loss
4.63 0.12 0.12
Section XIII. Documents Available for Reference
The Company reserved completed integrated documents for CSRC SZSE relevant departments and public
investor for reference including:
(1) Original Accounting Statement of 2020 carrying the signatures and seals of the legal representative CFO and
manager of Financial Department;
(2) Original Auditors’ Report (Chinese and English Version) carrying the seals of accounting firms and signatures
and seals of the CPA;
(3)All original documents and notifications of the Company disclosed in newspapers that designated by CSRC in
report period;
(4)Annual report disclosed in other securities market (Summary).
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